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ozgrakkurtyesterday at 10:26 PM1 replyview on HN

That example is a bit extreme but I can give two more normal examples.

Google/Nvidia and Apple/Nvidia. I don't think there is a world where nvidia will make more money than google or apple or keep making more money than them.

Also another one is Tesla. In my opinion, there is absolutely no world where tesla is worth the current stock price if you compare it to chineese companies or some company like Toyota.

Ofc at this point it depends on if you believe the stock market is absolutely correct or if it is correct in these specific examples. We can agree that it is correct in pricing Google higher than a car rental company but it is more complicated.

The prices are based on something but that something is so obscure and complicated that I don't see a way to make a calculation out of it outside of American ideology of stock market/capitalism.

> The fact that companies with increasing free cash flow over long periods of time always see increasing share prices over time is not random coincidence

This is just trivially related imo there is no real calculation between these things . And this relation it is breaking more and more lately as far as I can understand. This might mean stock market ideology is starting to diverge from the real world which is scary


Replies

nltoday at 2:23 AM

It might pay you to look at the numbers.

Last quarter:

Goog: $109B revenue, $62B in profit.

NVIDIA: $81B revenue, $58B in profit.

NVIDIA is growing faster.

I agree about Telsa though.