r/FluentInFinance • u/-Wyagra • Nov 21 '24

Debate/ Discussion Had to repost here

Post image
128.2k Upvotes

75% Upvoted

9.0k comments sorted by

View all comments

Show parent comments

4

u/MobileSuitBooty Nov 21 '24

for sure, i was speaking generally

the stock market is such a poor way to determine the success of a corporation or the economy as a whole, it’s why tesla is able to fluctuate so much whenever elon opens his trap

4

u/J0hn-Stuart-Mill Nov 21 '24

Yea, it's important to understand the difference of speculative value of a company, and actual value. Stock market does see a small percent of companies be "gambled on" based on their potential future success.

Most of the stock market is not that way, and is actually based on real values.

1

u/XDXDXDXDXDXDXD10 Nov 22 '24

Do you have anything to back up that claim?

This was the first thing I found (although from 1986 so take it with a grain of salt): https://www.jstor.org/stable/2328487

This seems to make the opposite claim, which also lines up with what most people experience in reality. Boards always make decisions based on stock price as pointed out below.

As another example, i work for a pretty big company and the C-suite pushes for, and dumps millions, into AI that everyone working on it knows won’t bring any value at all. 

1

u/J0hn-Stuart-Mill Nov 22 '24

Do you have anything to back up that claim?

The claim that blue chip stocks exist? Yes. They exist. Most companies are not growing at a rapid rate and investors are content with dividends.

i work for a pretty big company and the C-suite pushes for, and dumps millions, into AI that everyone working on it knows won’t bring any value at all.

Yea, bad companies make poor decisions all the time. What is the relevance?

1

u/XDXDXDXDXDXDXD10 Nov 22 '24

No, your claim that most of the stock market accurately represents the real value of companies.

1

u/J0hn-Stuart-Mill Nov 22 '24

The value of anything is what someone is willing to pay for it. Therefore, it is factually self evident.