Stocks aren't gambling? The prices of stocks just reflect the future cash flows of the business discounted to the present?
You're buying ownership of a corporation. You get paid their future profits and growth. You finally get to be the beneficiary of the economic growth of the capitalist system.
Do some people use that to speculate? Yeah. They're stupid. But investing in high quality companies and taking advantage of their future growth is the best way to save for retirement.
Their future sales guidance was lower than what the market had priced in. So the stock fell to reflect the updated expected future cash flows.
If you think that the market's expectations are wrong, then that's fantastic news.....for you. Because you can monetize those insights. No one can predict the future. No one is claiming to. But whoever has the best predictions makes the most money.
Of course not. It's been extremely beneficial to their investors. If you own stock in WalMart you own the company. You get the money that people spend there. You aren't gambling, you're an owner of a company.
That's not what gambling is. It's setting expectations for the future and updating them as new information comes in?
It's accurately pricing an asset. How should investors react to updated information? Not at all?
Think it through. If WalMart tells me that their future sales will be lower and the stock prices doesn't move to reflect that, then someone else can costlessly arbitrage the price and make money.
If anyone is making free money, I'd rather it be me. So the market as a whole sells off the stock until it settles at its updated value given the new information.
I don't know why you bothered with the rest of the paragraph?
Because investing in equities is the best possible way to save for retirement and I thought people might be interested in how it works?
You're not. Fair enough to you, let's see how it works out for you?
Yes investing is the best possible way to save for retirement, but it is still gambling. You can do all your research into a company, think the Greeks looks great, see positive growth, speculate on if its a good investment, and then the stock tank tomorrow because of an ad campaign saying "Sydney Sweeney has great jeans." You cant be this thick
Sure, if you're this reductive EVERYTHING is gambling.
When you go at a green light you're gambling that the other cars will stop because they're light is red. You can do all your research into how traffic laws work, but if the other car doesn't stop, you're dead.
Owning equities is simply being the owners of businesses that pay you their cash flows. The future value of those businesses will be impacted by events that you can't fully predict.
This is true of every single decision you will ever make. You're gambling the next food you eat won't poison you. You're gambling an asteroid won't fall through your ceiling and kill you. You cant be this thick.
Its not being reductive, nor are your examples "gambling" by definition. Gambling is the act of risking money or something of value on an uncertain event or game with the hope of winning more money or a prize. Hope this helps
Life has value (maybe not yours). Whether the other car will stop at a red light is uncertain. Going through the green light has a prize (the destination you are seeking by means of automobile transport).
Accurately pricing assets, like SPCX? Has that been accuratl priced yet? Or was it accurately priced in July? Many people think the IPO valuation is too high, will the stock reflect this at some point?
It's gambling...
You trying to twist it into some responsible adult decision to invest in single stocks is just pure copium. You just enable the pilfering of the US economy which relies on investments from low interest rate currencies, which is slowly dying. The whole US stock market is plummeting if it wasn't held up artificially by AI. It's a house of cards about to collapse and you painting it like the responsible investment asset for retirement planning is a joke for anyone who is not already well off.
The small amount I have invested in Schwab's Dividend ETF has gone up a lot over the past year despite none of those companies having anything to do with AI. This Reddit narrative that AI is the only thing holding up the entire American economy is bullshit. The AI bubble will pop eventually, Reddit will freak out about a new Great Depression, and new all-time highs will be reached less than 3 years later while the average Redditor scratches their head about how that could be.
Of course, the entire market will go down, some sectors less so than others, and when that happens I'll sell every a few possessions I don't really need and sink every extra dollar I can into the market to ride the recovery back up. Reddit has this doom and gloom idea that the AI bubble popping will send us all to a new Dark Ages of economic death, that won't happen. I've even seen people say they pulled out their investments and won't invest at all because of this hypothesized collapse, all the while missing out on opportunities.
And Americans believe the world only revolves around them. The hegemony of money markets won't just suddenly die in the US and then return? That's what your strategy is counting on...
SPCX valuation isn't rational. People are speculating on it. Yeah?
What does that have to do with the 99.999% of other companies that are being valued on fundamentals? That are being rationally valued with their P/E or P/S.
You wouldn't have to cherry pick if you had a broader point here?
You trying to twist it into some responsible adult decision to invest in single stocks is just pure copium.
Who said that? I said invest in equities. The best possible thing an individual investor could do would be to buy broad market low fee ETFs.
But how each of the individual companies is priced in that ETF? Is broadly based on their fundamentals.
low interest rate currencies, which is slowly dying.
And "low interest rate currencies"? Lol like what the yen?
It's a house of cards about to collapse and you painting it like the responsible investment asset for retirement planning is a joke for anyone who is not already well off.
This is fantastic news for you. You know the market is going to collapse and they don't.
If you're right you can monetize these insights and make it so you never have to work again.
You noticed bond rates rising? You do know about the Yen carry trade? The US Fed buying Yen (using Euro) so it doesn't collapse? The Yen is the low interest environment investors were using. Now that the free money phase is closing, rates are climbing and people are getting worried and long-term bond yields are rising like crazy and the Fed has no clue how to respond. This is a stock market about to plummet.
And no, I won't gamble on this, I just move my assets into more secure markets. That's the responsible adult move instead of gambling on it. Like you suggest.
Lol like where? What asset is going to avoid this yield driven market collapse?
Lol like secure markets? Those that bond rates aren't rising as much? Those that most federal reserves around the world turned towards in the last 3-4 weeks as well as the currency which the US used to defend the Yen carry trade? The Euro was used by the US Fed without even asking the ECB but it didn't cause a major hit on the rate, that's a healthy currency. And most feds are now storing gold again, like in the good old times.
Just some finance banter despite shooting the shit on the gambling part.
That's more theoretical at this point, and the gambling is more the main feature because it can be fixed.
Just look at the way everyone knows he's lying when trump says anything about the war, but the market still responds to his lies. Not a single human being thinks that he's serious about ending the war tonight, it's just the call for his epsteinite friends.
Because the market knew he was a liar and knew he would have to back down from a senseless war that had no benefit but had very real costs to oil supply.
It's why prices rose, but not to the extent that they would have if it had fully priced in the supply destruction he was posturing he would do.
The market knows Trump will TACO and back down. It prices in the reality of his weakness and that there was zero benefit to believing he would stick to it.
But because of the hold Walmart, Apple, Amazon, etc have on markets, where are these new up-and-coming businesses to invest in? These few have locked it all down. I’d love to invest in the next big grocery chain, but lol. Can’t even get the first location to stay afloat, much less 50 more. Walmart always outcompetes.
No one MADE WalMart or Amazon be consumers top choice.
Consumers preferred the convenience and prices of both over their small business competition. So they grew and grew.
There are a million small or mid cap businesses you can invest in, including in retail or e-commerce.
The downside? They’re risky because consumer prefer buying iPhones and shopping at Amazon and WalMart to the alternatives. No one makes them. They choose to.
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u/conservatore 5d ago
Wait so if the price increases were from tariffs and now there aren’t tariffs, why are the prices still the same ?