| crissindahouse said: @kynes nahh the price is just speculation and not the real price. apple 4x more worth than toyota for example is stupid in my eyes. if both companies wouldn't be on the stockmarket owned by one guy he could get much more for selling toyota or let's say the same. us-americans and brits love the stock market much more than let's say most europeans, we don't see it like them. it's not like normal people really pay so much for an apple stock because they think one part of apple is it worth, they just think it could rise even more. if these people would have to pay for a part of apple or toyota without stockmarket i bet most woudn't pay 4x more for a one millionths part of apple than they would pay for the same of toyota. |
Toyota still hasn't recovered from the recession while Apple has experienced huge growth. Toyota sees more revenue, but Apple's Net Income is more than four times higher than Toyota's. If anything Apple is undervalued in comparison to Toyota (and compared to many other growth companies, it is undervalued). Also, considering Apple will likely have around $90 billion in cash/investments when they report for the last quarter and no long term debt, I don't see how you can say it should be valued at under $100 billion.
Your argument would be better aimed at a company like Amazon who ( a few months ago) briefly had a market cap above Toyota's. The fact of the matter though is that the stock price is what people in the real world are willing to pay for a company. That price can still be driven by speculation, but that is not something unique to the stock market. You might think the prices people paid for a Ken Griffey Jr. card, a Beanie Baby, or a home in southern California were stupid too, but those were all driven by speculation independent of the stock market. Most investments are based on speculation. If you expect an investment to appreciate, that is speculation. Same if you sell one that you expect to depreciate.
Do you think private companies are never valued and bought based on their future growth?
