PowerBook is dead; MacBook Pro is here (Intel-based)

[Q Classic]

Also, Agathon:

I've yet to find any economist/businessperson who agrees with your interpretation of stock price and total market valuation of stocks as being an indicator of size.

If you're arguing about value or worth, then... Nope, I still can't find someone who agrees with you.

I have a funny feeling that for all your statements on this matter, and how you rigorously support Communism, you seem to be missing how stock markets work--largely because it seems that you're trying to hammer the square peg that it is into the round hole that is the theory of Capitalism.

[Agathon]

Originally posted by Oncle Boris
Imran, you do realize that "intrinsic value" is a COMPLETE nonsense, right?

Yeah, he's right. I don't think that a capitalist could theoretically be committed to the concept at least in the case of goods.

[Imran Siddiqui]

Warren Buffet isn't a capitalist? He has his own intrinsic value formula for investments, after all (which he ain't sharing.. because, well, that's how he makes money).

And I think the more interesting part is how market capitalization can (and does at times) exceed shareholder equity.

[Agathon]

Originally posted by Q Cubed
Also, Agathon:

I've yet to find any economist/businessperson who agrees with your interpretation of stock price and total market valuation of stocks as being an indicator of size.

If you're arguing about value or worth, then... Nope, I still can't find someone who agrees with you.

I have a funny feeling that for all your statements on this matter, and how you rigorously support Communism, you seem to be missing how stock markets work--largely because it seems that you're trying to hammer the square peg that it is into the round hole that is the theory of Capitalism.

Many capitalists do not understand the logic of their own system. One of the fundamental principles of capitalism is that markets determine the value of commodities in the sense of economic worth. In other words, the amount of shoes that get made depends solely on what people are willing to swap for them and what the manufacturers are willing to take in exchange. The very idea of commodities having a value above and beyond what people are willing to trade for them is anathema to capitalism.

If you want to know what a company is worth, look at the price. Similarly, if you want to know how much a pair of Reeboks is worth, look at the price.

It's like when capitalists complain about price gouging. In theory they have no basis to complain about it, since the increased prices are just symptomatic of an increase in demand or a decrease in supply.

[Asher]

Many capitalists do not understand the logic of their own system.

Oh, cram it, Aggie. You've shown yourself to not understand some of the fundamental concepts of the system in this very thread, and you spew this kind of sh*t.

You're not intellectually superior to capitalists...to say the least.

[Asher]

Aggie, here's a philosophical question for you:

Does the share price reflect the value of every share of the company, or just the price a share is going for the moment it is purchased?

[Lawrence of Arabia]

Its obviously the price of every share, since when you sell a share, you get that price, no matter what you bought it at.

[Asher]

Is it possible to sell every share of the company at that price?

It's only the price of every share in the company in theory. In reality, that's not what happens...unless we're talking about a buyout. The act of selling shares affects the price of the shares.

And in a buyout, looking at market cap will lead to a disaster...like AOL-TW.

[Lawrence of Arabia]

if you sell every share at once, then yet it is possible.

[KrazyHorse]

No way you could do that for a company the size of Apple

[Asher]

Originally posted by Lawrence of Arabia
if you sell every share at once, then yet it is possible.

Again, it's time for you and Aggie to enter the real world. That will never happen.

This is a bit of a tangent, anyway... the point is, market cap doesn't mean much. Aggie's use of it as a way of flaunting Apple's success is a bit peculiar, given how recently the market reacted to such similarly overvalued stocks with high market prices, with the dot-coms and AOL-TW.

Instead of looking at the market cap and share price with jubilation, the wise investor will see the writing on the wall.

[Agathon]

Why is this any different from "if you bought every pair of Reeboks in the world at once"?

If you tried to do that the price would go up.

If you tried to sell them all at once, the price would go down. That's just the market.

The worth of a commodity is what people are willing to pay for it. I of course, being a commie, think that this is horse ****, but I wouldn't dispute that it is what market value means.

[Lawrence of Arabia]

No way you could do that for a company the size of Apple

doesnt matter. thats still the way it is.

the question is not if it will happen, but if it can happen.

[Asher]

Originally posted by Agathon
The worth of a commodity is what people are willing to pay for it. I of course, being a commie, think that this is horse ****, but I wouldn't dispute that it is what market value means.

You aren't looking at the situation deeply enough. Yes, that's what stocks are on the surface.

The problem is, people buy them believing that they will get a return on their investment. They think the price will continue to increase. It is completely possible for a company to never make money and have its shares increase in price -- if people keep wanting to buy the stock, that's what will happen.

That doesn't make it a good idea, nor does it mean anything for that company to start bragging about how high their price is.

The higher a stock price is without solid earnings and dividends to justify that price, the farther it has to fall once the invisible hand that pushes the price that high falls.

Comparing the value of stocks to the value of Reeboks shows just how little you understand of the market.

[Agathon]

There are two questions here:

(1) What determines the value of a commodity (in this case ownership of a company). The answer to that is: what it takes to buy it, even if you are only buying a piece of it.

(2) Are Apple's shares overvalued? If you mean by that: "Is Apple's share price not reflective of some other 'real value'?", then you are talking crap, because in capitalism commodities have no other value than exchange value (what you have to trade in money or other goods to get it). On the other hand, if you mean "Will Apple's share price collapse in the future, meaning that buying the stock at the current market price is a bad investment?", then that is a sensible question. These are different questions. One makes use of some spurious concept of "real value", the other does not.

As to whether Apple's stock will increase in value or decrease, I can't say. I am not a stockbroker. Many of the analysts that do cover Apple seem to think the share price will climb to over $100 a share, and I haven't seen any reputable sources claim that the share price is about to collapse. The current wisdom seems to be that, whatever happens to their computer business, Apple with the iPod is in the position Sony was in when the Walkman came out, and Sony sold bucketloads of those even after competitors finally got on the bandwagon. I certainly don't want to take advice from Asher, who has predicted the imminent demise of the iPod phenomenon for over 4 years now. I see that he himself has personally contributed to the iPod's doom by recently purchasing one.

All this is moot. I don't really care whether Apple is worth more than Dell except that it is amusing to poke fun at Michael Dell, who claimed less than a decade ago that Apple's stock was so worthless that the company should fold and sell all its chattels, dividing the money between the investors. Since Apple's shares are now worth more than Dell's I imagine that he's getting a few amusing emails.

It's as funny as Gates predicting that spam would be dead in 2 years...