Technology
This is the official technology community of Lemmy.ml for all news related to creation and use of technology, and to facilitate civil, meaningful discussion around it.
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traditionally a stock price is the net present value of all future dividends. just like a home price is the net present value of all future rent payments. of course its all off the rails now due to extended periods of minimal interest rates and dollar cancer.
What? The stock price is based on the valuation of the company, not future dividends. Many stocks don't pay dividends at all, or do so rarely.
Similarly, a home's price is the market value of the home, not how much the rent/mortgage payments would be.
the valuation of a publicly traded company is traditionally the future dividends of outstanding shares. stocks that dont pay much dividends are counting on a growth strategy, capturing market share.
again with the homes, the market value of the home is traditionally based on what future revenues can be extracted out of it.
'the price is the value' should be based on something other than bigger fools.