Anonymous #2 4w

Basically everything is “based on nothing” when you think about it. The price of everything is ultimately driven by supply and demand

1

Anonymous #1 4w

"akin to a stock but based on nothing" so the rest of the sentence was a valuable read

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Anonymous #1 4w

That’s true, although there is always an inherent demand for things like water and people have valued gold since ancient times.

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Anonymous centrist 4w

sorry youre gonna have to connect the dots for me what does that have to do with cryptocurrency that it wouldnt have to do with anything else

1

Anonymous #2 4w

part of the issue is that it’s still based in faith but that faith is not standardized or enforceable currently

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Anonymous #2 4w

Yeah I read it, what drives the price of a stock? Unless there’s a significant dividend (greater than risk-free rate), it’s basically just supply and demand. You don’t actually get anything from buying a stock other than the right to sell it later, hopefully for more money

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Anonymous #1 4w

stock is based on performance of company. company does poorly, value literally goes down. unfortunately, stocks are also kind of complete bullshit thanks to buybacks, which inflate the value even if the company is doing poorly.

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Anonymous #2 4w

sorry i was talking about crypto, so as far as stocks go i agree (tho you could argue that the company doing well has to do with the faith of the consumer but that has a more material basis)

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Anonymous #2 4w

Well no, stock is based on investor predictions about future performance of the company. Because they want to make money. It can sometimes be completely detached from realistic expectations for the company as well. It really only matters if the company gets sold or there’s some M&A event where another institution gets to decide the price you get cashed out at. Beyond that there’s not really anything that ties the price to company performance

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Anonymous #2 4w

I mean a buyback is literally the company removing supply so the price goes up, considering the demand stays roughly the same (or often times increases because of improved investor sentiment)

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Anonymous #1 4w

based on future performance of the company. if it doesnt meet that, it tumbles. if they dont make deals or things fall through, it tumbles. its tied to performance, sometimes perception is on the future but the future arrives and becomes the now. its not common that a company stays in the future perception for so long

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Anonymous #1 4w

buyback isnt just supply vs demand it literally affects the eps, because the shares outstanding (denominator) is affected

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Anonymous #2 4w

Investors don’t ever care about how the company is performing now. Even when the future becomes now. Because investors don’t care about how much the stock is worth now. They care about how much it will be worth when they want to sell it. That’s why the dot com bubble happened and the AI bubble is happening now. It doesn’t matter what’s happening now as long as “AGI” can come in a few years

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Anonymous #2 4w

The shares outstanding could also be called the _______?

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Anonymous #1 4w

yall i don’t disagree im just saying the only reason any of this works is because we say it does 😭 materiality is the only thing of real value. if the material is obsolete or not useful anymore then people lose faith etc.

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Anonymous #3 4w

and ik they aren’t entirely based in that materiality i was just saying they’re more tied to it than something solely faith based

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Anonymous #1 4w

shares outstanding is supply, yes. but the metric which is based on supply to determine how valuable the share is, is also dependent on performance - demand is based on performance. people sell when performance is bad, or perceived performance is bad. perceived performance is also based on something. meta stock dies when theyve got 9 antitrust lawsuits because that is material

1

Anonymous #4 4w

Case in point, the decentralized argument evaporates when you’ve got Peter Thiel and entire private equities and even banks buying it up just to sell it for greenbacks later at a profit. Institutional interest is not a good thing. It’s for pumping the price and leaving you holding the bag later

1

Anonymous #1 4w

performance and perceived performance are very real and what ties stocks to reality. its not a 1-1 tether, but it is based on performance. im not for this system, make no mistake. i do believe there is an ai bubble, but thats not just stocks involved. money is flying around and that means something is happening, so stocks go up, but i think that money is being burned

1

Anonymous #1 4w

there is a very material aspect to investing but tesla being where it is or nvidia and amd being where they are isnt really material anymore. just like gamestop or whatever else wasnt tied to performance.

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Anonymous #2 4w

yes i agree, i think we might just using different terms here. i’m calling perceived performance or collective agreement here faith (faith in the product/company, faith in the returns, faith in growth etc.) that faith *can* be based on actual performance though doesnt have to be, like you said not 1-1. so more beholden to the material nature but always.

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Anonymous #3 4w

but not always*

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Anonymous #3 4w

and all of these things have real consequences as well so i’m not saying that faith isn’t “real” just that values aren’t inherent

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Anonymous #2 4w

No one serious uses EPS for valuation. If anything they use the P/E ratio which doesn’t change with a change in supply. Also Meta stock is up 21% this year so it’s far from dead. The performance is only really tied to the price because the demand is tied (to an extent) to the performance. But it doesn’t really have to be. And yeah, the global money supply is pretty much always increasing so stocks tend to go up with it. Same goes for assets like gold and Bitcoin. More money=more demand

1

Anonymous #4 4w

The stock market has lost 20% of its value in months before. Same with other “hard assets” like real estate, oil, gold, etc.

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Anonymous #1 4w

Right, but people don’t roll up to McDonald’s asking to pay for a quarter pounder with stocks or a barrel of oil do they? Cryptocurrency is not a currency. No one uses it as a currency, outside of people who have something to hide.

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Anonymous #4 4w

Sure, but what if I want to send money to a merchant or someone in a different country without potentially paying loads of processing fees and going through legal processes and whatnot? I think there is cases where Bitcoin makes sense as a currency even if it’s not an everyday thing

1

Anonymous #1 4w

There are cases like that for sure. But for the vast majority, stuff like Zelle and PayPal and Cashapp is more than enough. Without having to deal with vastly floating exchange rates. Also, I am not a fan of the tax BS on crypto trading. I gave it up years ago, when my exchange went under and I needed cost basis

1

Anonymous #1 4w

p/e... is calculated with eps as the denominator. eps is affected by supply change. my example about meta was abbreviated. meta (maybe it was google? idr) faced a bunch of antitrust lawsuits, stock tumbled. they beat one, stock rose back to where it would have been, assuming performance is normal. amd and nvidia shot up iirc in past 48 hours because of their deals (performance) with each other. again, all to say stocks are based on something. its not just faith or random perception, like crypto

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Anonymous #2 4w

Lmfao. Price = market cap/shares. EPS = earnings over shares. Considering a buyback doesn’t inherently change market cap or earnings, it doesn’t change P/E.

1

Anonymous #1 4w

pe ratio = price/eps. market cap is determined by price * shares, not the other way around. price is not calculated. a buyback impacts shares outstanding, which directly affects eps, which directly affects pe ratio. all of which is irrelevant to the statement that stocks are based on something, crypto is not. im mighty fuckin confused by you *calculating* price

1

Anonymous #2 4w

Oh my god are you mathematically illiterate. If market cap = price * shares then price = market cap / shares

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Anonymous #2 4w

Even if what you’re saying is true that “price isn’t calculated” the price in a buyback increases by the reciprocal of the percentage of shares still outstanding so it doesn’t change P/E

1

Anonymous #1 4w

why would you need to calculate price???? its an independent variable in the equation, why are you starting from market cap? im not mathematically illiterate, what youre doing is just nonsensical. and buyback literally does impact pe this is readily available information online man

1

Anonymous #2 4w

Market cap is the independent variable, share price is dependent. And basically 99% of the time the price increases proportionately to the decrease in shares. When that’s not the case it’s usually because of a change in demand based on that news. Market makers don’t get duped by share buybacks, it’s a moot point

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Anonymous #1 4w

what the fuck are you talking about man where is this coming from. market cap is not the independent variable what the hell. who or what is telling you this stuff?????

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Anonymous #1 4w

we cant agree on the literal most simple thing, youve gotta help me see whats going on here before we can talk about anything else. please show me who or what is telling you market cap is independent and determines share price

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Anonymous #2 4w

clearly this has been seen but no response. ?

1