I was being facetious when I wrote that.
A stock can't be removed from the underlying asset. The company, the enterprise, has a real fundamental value. While that value changes relative to the price of money, relative to expected inflation rates, the price of other assets of similar risk, etc. the enterprise produces a product and that product produces profits, the company has a historical and theoretical future growth rate. All those things can be assigned a value. Now you and I might not agree on HOW to assign that value, what weight to give each aspect related to value, but if I'm going to buy or sell something using my hard earned money, I sure as hell want to assign SOME value to the company which has a little more meaning than simply the price someone on the other side of the transaction is willing to provide for.
A few million RE holders found out the hard way that transaction price can be ephemeral whereas the debt incurred to buy the asset, not so much. |
