It's somewhat amusing to see Apple throw away market leadership now, just like it did in the 80s

[Fake Boris]

How can they be so unbelievably stupid?

[Kuciwalker]

The stock is high because idiots keep buying it.

Doesn't work. As long as the fraction of non-fanboy investors is non-negligible the price represents the opinions of the smartest players in the stock market, not the dumbest.

[Jon Miller]

Not entirely correct, because the opinions of the smartest players on the market are going to be to buy it to take advantage of the fact that the idiots want to buy it.

(Not saying that it is idiots who are keeping Apple high in this case, just saying that a strong irrational market for a stock will drive up the price because smart players of the market will want to take advantage of that.)

JM

[giblets]

The stock is high because idiots keep buying it.

Doesn't work. As long as the fraction of non-fanboy investors is non-negligible the price represents the opinions of the smartest players in the stock market, not the dumbest.

Please explain. Why isn't it possible for the stock to reach a point where all of its owners are stupid fanboys?

[Asher]

The stock is high because idiots keep buying it.

Doesn't work. As long as the fraction of non-fanboy investors is non-negligible the price represents the opinions of the smartest players in the stock market, not the dumbest.

Of course it works. Just like the reason gold is high is because idiots keep buying it. There's very little intrinsic value in either that is justified by the price, either in current earnings (or realistic future earnings), or the utility of the material.

You get enough idiots buying a stock, and its value keeps going up as the universe keeps cranking out more idiots. It's a bubble.

[Felch]

Yeah, bubbles aren't governed by rational economics. They're a product of human failing, and rational people exploiting idiocy.

[Kuciwalker]

Of course it works. Just like the reason gold is high is because idiots keep buying it.

This is also untrue, but for the simpler reason that 'gold bugs' are a small proportion of the gold market.

[Asher]

Mmhmm.

[Kuciwalker]

Dude, the total value of worldwide gold holdings is somewhere in the trillions of dollars.

[Asher]

Yes. And?

My point is the value does not reflect its utility, so you refute with the total value?

[Kuciwalker]

My point is that the gold bugs represent a small fraction of the market.

[Asher]

There are more idiots than just gold bugs. The ETFs buying up gold also qualify as idiots.

[Dinner]

Obviously a lot of people are perceiving gold to have some utility useful to them or else the value wouldn't be so high.

[Kuciwalker]

There are more idiots than just gold bugs. The ETFs buying up gold also qualify as idiots.

[Kuciwalker]

Obviously a lot of people are perceiving gold to have some utility useful to them or else the value wouldn't be so high.

This. Gold pretty much doesn't depreciate at all, so its high price can easily be justified by expected future consumer use.