[berkeleyjunk]

I thought about that too, but realized that it is double counting the returns. If you look at the Discounted Cash Flow (DCF) method for valuing the company, the current value of the company is already the sum of the discounted cash flows from the future. i.e. the next 3-5 year returns are already priced into the pre 30% hike value.

[adtac]

DCF and other tools to value companies make sense when the valuation is somewhat stable, but the real world often isn't. MSFT was worth $1T a few years ago because the world presumably expected $1T in profits over the lifetime of the company. But OpenAI came around and suddenly they're worth $2T. It wasn't because their lifetime doubled, it was because most people perceive AI as a major advancement. I believe this is the primary thrust behind the S&P500's 7-10% annualised returns in the last 20 years because most of the gains have come from the top.