News this week that inflation eased more than expected in October solidified the view that the Federal Reserve is done with its most aggressive rate-hike campaign in four decades.
And that could be a boon for the stock market and your 401(k).
News this week that inflation eased more than expected in October solidified the view that the Federal Reserve is done with its most aggressive rate-hike campaign in four decades.
And that could be a boon for the stock market and your 401(k).
Stock price isn’t necessarily tied with profits, nor doesn’t have to. It’s more of a sign of confidence the company will do better than it currently is. That measurement with a lot of tech companies was tied to increasing marketshare.
The hope is that eventually a company’s high marketshare can be leveraged to produce profits later.
“I’m confident that this company that has never made money will make money someday, so I’m going to pay $30 a share for it” still sounds like it’s imaginary money to me.
The more apt comparison would simply be gambling, if you wanted to be reductionist.
That’s because you don’t understand how new and growing companies work. You don’t show a “profit” if you invest your revenue back in the company.
No, it’s called expected value. Amazon never made a profit for decades until it did.
Bezos opened Amazon in 1994, took it public in '97 and in 2003 it earned its first full-year profit. So 9 years to be exact.
source and source
I mean the fact that it didn’t have a profit for many years after that. Until 2017 it was essentially 0 profit because Bezos kept reinvesting the money back into the business