Oprindeligt skrevet af Alxndr:

Like if it can reach $4.5trillion, why not $10trillion, why not $50trillion, why not $100trillion? Money clearly seems to be infinite and meaningless when it comes to the stock market.

Inflation would hit ya there. In theory you could hit 10 trillion, but not overnight, it would have to be over decades. Also half the "worth" is in what it produces or owns, not the coherent face value of the company
Nvidia produces chips for literally everything.

The U.S. has 330 million people while the UK 67 million. Bigger domestic markets let companies scale faster and bigger.

The U.S. has the deepest, most liquid stock market on Earth. There’s more money sloshing around to invest in U.S. firms, and it’s easier for them to raise large sums.

The biggest U.S. companies (Apple, Microsoft, Nvidia, Amazon, Alphabet) are tech companies. Tech has very high profit margins, low marginal costs, and global reach. One successful product can serve billions of people with little added cost. The UK’s big players (banks, energy, pharma) just don’t scale in the same way.

U.S. stocks are priced in dollars. The dollar has been strong, which amplifies the gap when you compare across currencies.

Market cap = stock price × shares outstanding.
It’s not how much cash they have, it’s the market’s collective estimate of future profits.

If Nvidia is worth $4.5 trillion, the market is essentially saying:

“If we add up all the profits this company will make in the future, discounted back to today, that’s about $4.5 trillion in value.”

That’s why prices move so much on expectations. If people think Nvidia will sell even more AI chips than expected the value jumps.

In theory, nothing stops a company from reaching $10 trillion if its expected profits are high enough. In practice, there are limits like competition eating margins, regulation grows as companies get too powerful, diminishing returns means even the largest markets cap out eventually.

But yes, valuations have exploded because tech companies have global reach. Apple alone makes more profit than many countries’ entire GDP. It’s not that money is infinite, it’s that investors are projecting massive future profits.

Oprindeligt skrevet af Brma:

The U.S. has 330 million people while the UK 67 million. Bigger domestic markets let companies scale faster and bigger.

The U.S. has the deepest, most liquid stock market on Earth. There’s more money sloshing around to invest in U.S. firms, and it’s easier for them to raise large sums.

The biggest U.S. companies (Apple, Microsoft, Nvidia, Amazon, Alphabet) are tech companies. Tech has very high profit margins, low marginal costs, and global reach. One successful product can serve billions of people with little added cost. The UK’s big players (banks, energy, pharma) just don’t scale in the same way.

U.S. stocks are priced in dollars. The dollar has been strong, which amplifies the gap when you compare across currencies.

Market cap = stock price × shares outstanding.
It’s not how much cash they have, it’s the market’s collective estimate of future profits.

If Nvidia is worth $4.5 trillion, the market is essentially saying:

“If we add up all the profits this company will make in the future, discounted back to today, that’s about $4.5 trillion in value.”

That’s why prices move so much on expectations. If people think Nvidia will sell even more AI chips than expected the value jumps.

In theory, nothing stops a company from reaching $10 trillion if its expected profits are high enough. In practice, there are limits like competition eating margins, regulation grows as companies get too powerful, diminishing returns means even the largest markets cap out eventually.

But yes, valuations have exploded because tech companies have global reach. Apple alone makes more profit than many countries’ entire GDP. It’s not that money is infinite, it’s that investors are projecting massive future profits.

Excellent post!

That's what the posters on this forum that are all about China,China,China, never realize...the top 4 or 5 US Corporations combined are worth more then the entire Chinese stock market combined.

Oprindeligt skrevet af Alxndr:

I don't even fully understand how much a trillion is… … we can't type it or count to it.

1,000,000,000,000

It's simple - it's because the stock market is absolute bollocks.

And it's dead easy to demonstrate.

Go look at any time when a company makes some speech or announcement. One based on nothing except promises, and nothing concrete. Their value may go up, sometimes by a lot.

Nowe ask yourself, where's that value coming from? NOWHERE.

And that shows you exactly why it's nothing more than gambling, or as someone recently made me laugh by saying "astrology for boys".

Just wait for the bubble to burst like the dot com bubble. Just look up a company like Lycos.

stuff like market share matters, the closer a company is to a monopoly in a lucrative market the more valuable it will become

the wild west

sadly the economy does to pay people what their actual real economic value is but only their rarity.

real economy = total pool of goods and services..
one can see how having nurses and teachers is far more vital for society to function than having footballers... yet a footballer can earn billions....

enternainment is far less vital.. heck even educated doctors earn less.,.

likewise the amount of work.. to provide bank services is very tiny compared by the amount of mooching they do..

and than there "investors" who can do financial shenenigans that actual destroy compagnies aka lower the pool of goods and services (in the old days you started a factory that made stuff now a risk investor buys a compagny than puts the money it buys it with as high interest loan on the balance.. the intererst owned to themselves on a second corp in a tax haven..

thus the previous profitable compagny makes now on paper losses and stops paying taxes
=> the first few years they masque this by pulling all wealth out of it..
all assets are sold say the compagny is old own alll it's buildings, and has all stock fully paid off.. they will sell those buildings (possibly to their own other corporations) and start delaying paying supplliers.. and pay taxes later and later..

but they will also make sure to squeese the staff and treaten the goverment.. give us aid. allow us to cut workers wages by 25% and fire them without invoking severance fees.. . or we will no longer fund the losses (on paper they put a few million which ofcourse will mean a 100+ year old institute than 10000+ employees rely on and many customers too.. collapses.. so usually goverments and unions give in.. due to big to fail..

once with these tricks they pulled out all they can they let the whole thing go bust anyway..
leaving the employees without job and with many months of wage they never recieved (stopping paying wages is often the last trick to pull out a little more the last few months)
+ the goverment can forget the millions in taxes it was owned
+the employees can forget delivery of products ordered
+often like dominio's many smaller firms go bust in their wake as suppliers suddenly face never being paid by what always was a trustworthly parnet and on whoem over it's 100 year excistence they have build a dependency...


and somehow these parasites called "risk investors" who clearly destroy so much capital.. if you read capital as goods and services... by these tricks make their investment go 10 times in 3 years...

in fact in the current economy more money is made by the fake economy aka tricks like this.. than by the actual delivering goods and services..


the fake economy also consist out of less parasitc elements.. say I take something worthless and sell it to you for 1 euro.. than you sell it back to me for 10.. than I to you for 100... and so on..

than you make this whole scam more obscure.. by basicly saying scam.inc goes up x10 every year... you can not buy futures... and derivates....

and so nothing real is sold.. pure fictious air.. what happens with fake bored monkeys is a large chunk of the economy sadly.. much more money is earned by fake stuff like that than by creating any service or good of actual use aka value.


other examples are compagnies worth billiosn who never have made a single cent profit.. but cause they keep rising in value due hype can keep selling stock. and get loans backed by that stock... thus keep basicly lending forever... and no lender wants to pull the rug.. for they are already so heavy invested

so why is a compagny like nvidea worth so much more..
speculation... because people expect it to be worth even more tomorrow..


it bears no relevance to it's actual divident... the relative value of the goods and services delivered..

while if a likely much cheaper medical facility or even compagny like asml would no longer be there tomorrow.. it woiuld hurt mankind much more than if nvidea was there no more..

saidly people are paid to how easy it is to find somebody else to do what you do.. not the value or essential of the service or goods made by your labour..

supply and demand... not real value.


likewise the value of most corporations.. is also driven by how eager people want to have their stock.. not actual asset or profit value...

Allegedly there are billions of people on the planet. So if we take the biggest countries with some billion people and factor in how much human resources and their parts are worth on the market - the biggest corpos (the governments) are worth not trillions, but quadrillions on their livestock alone.

Oprindeligt skrevet af crunchyfrog:

It's simple - it's because the stock market is absolute bollocks.

And it's dead easy to demonstrate.

Go look at any time when a company makes some speech or announcement. One based on nothing except promises, and nothing concrete. Their value may go up, sometimes by a lot.

Nowe ask yourself, where's that value coming from? NOWHERE.

And that shows you exactly why it's nothing more than gambling, or as someone recently made me laugh by saying "astrology for boys".

Crunchy do you really believe that? If a company's predictions are overoptimistic, when the next quarter's actual numbers come out, their stock price will fall. It is up to the investor to determine for themselves if corporate predictions are plausible, and act accordingly. Possibly even including shorting the stock of a company whose predictions seem very unlikely, but enough other investors bid up the price anyway.

Investing is MUCH different from gambling.

Oprindeligt skrevet af Brma:

The U.S. has 330 million people while the UK 67 million. Bigger domestic markets let companies scale faster and bigger.

The U.S. has the deepest, most liquid stock market on Earth. There’s more money sloshing around to invest in U.S. firms, and it’s easier for them to raise large sums.

The biggest U.S. companies (Apple, Microsoft, Nvidia, Amazon, Alphabet) are tech companies. Tech has very high profit margins, low marginal costs, and global reach. One successful product can serve billions of people with little added cost. The UK’s big players (banks, energy, pharma) just don’t scale in the same way.

U.S. stocks are priced in dollars. The dollar has been strong, which amplifies the gap when you compare across currencies.

Market cap = stock price × shares outstanding.
It’s not how much cash they have, it’s the market’s collective estimate of future profits.

If Nvidia is worth $4.5 trillion, the market is essentially saying:

“If we add up all the profits this company will make in the future, discounted back to today, that’s about $4.5 trillion in value.”

That’s why prices move so much on expectations. If people think Nvidia will sell even more AI chips than expected the value jumps.

In theory, nothing stops a company from reaching $10 trillion if its expected profits are high enough. In practice, there are limits like competition eating margins, regulation grows as companies get too powerful, diminishing returns means even the largest markets cap out eventually.

But yes, valuations have exploded because tech companies have global reach. Apple alone makes more profit than many countries’ entire GDP. It’s not that money is infinite, it’s that investors are projecting massive future profits.

Awesome post thanks for explaining all that.

A lot of people always say to me "but tech might be lead the market in 15 or 20 years, if you look back 20 years ago it was oil and banks that led the market" etc.

But the thing with digital technology is it'll be ingrained in every future industry, even ones we cannot think of yet.

Space travel, bioengineering, neural engineering, synthetics, robotics, fusion power or whatever.

All of those industries are going to require data centres, high scaling compute power, digital infrastructure, design software, AI, chiplet designs etc etc.

Digital technology is basically like oxygen, we don't know who will breath it but everyone will need to breath it.

Money is fake, the economy is fake, most of the jobs are fake. It's a pyramid scheme.

As long as you don't realize this though... IT JUST WORKS.