[solatic]

> wouldn’t there be a point where we can concede that it is actually valued properly, and it’s your valuation model that needs to adjust, not the market?

Requires an alternate proposal about how to value stocks, and in aggregate, the stock market at large.

The only reasonable way to value stocks is in their potential, upon purchase, for the purchase price to be returned via dividends issued on future profits (even stock buybacks ultimately justify their price increase on dividends being divided among fewer shareholders).

> After 100 years of being “overvalued”, can we call that the real value? 1000 years?

Stocks are being priced at levels that will require longer than a full human lifetime to return their share price via dividends. "Overvalue" is subjective; some people will be fine with the idea that only their children (or, someday, only their grandchildren, and so on ad infinitum) will see a profit. People will also pay a premium for the liquidity of the stock market compared to less-liquid investments (e.g. real estate).

There is simply too much cash sloshing around compared to the opportunities for return available.

[_se]

Complete nonsense. Your understanding of investment is entirely flawed. Dividends are one element of the value of a stock, but there are many, many others. Chiefly, the expectation that the stock will rise in value such that you can later sell it for more than you purchased it for.

A parallel to draw very easily is an investment in commodities. Those will never pay a dividend, so therefore they're worthless? Obviously not, you invest in them because you expect their value to rise. Same with a stock.

An asset is worth what someone is willing to pay for it. That is its value. Intrinsic value is an element, but not the most important one.

[watwut]

Yeah many people use stocks as a gambling device. But we are supposed to pretend it is more then a giant casino.

[_se]

You also display either a very basic misunderstanding or willful ignorance. There's no gambling involved - investing is not dumb chance. There are real companies behind these purchases with real expectations of future growth and thus increase in value. Or vice versa.

Everyone loves the "you can't beat the S&P" trope, but that's also just ignorance. There's a reason that proprietary trading firms generate more profit per employee than any other business in the world.

[watwut]

I do personally know people who do invest and it is 100% gambling for a lot of small "investors". The only ignorance is to pretend it is not a thing. This point becomes super clear once you start looking at trading apps targeting this market.

> There's no gambling involved - investing is not dumb chance

First a gambling does not have to be a theoretically pure dumb chance in order to be gambling. Second, in practice it basically the same thing as betting on horses used to be.

There is a reason why small investors loose money on their investments on average despite markets going up. Because what they do is not investing.

> There are real companies behind these purchases with real expectations of future growth and thus increase in value.

Oh common, this relationship is quite broken for exactly the most known companies.

[solumunus]

> There is a reason why small investors loose money on their investments on average despite markets going up.

Source?

[Esophagus4]

> Everyone loves the "you can't beat the S&P" trope, but that's also just ignorance.

This seems like a willful misinterpretation.

They say “you won’t beat the S&P” because maybe some HFT firm with highly secretive and advanced technology and MIT PhD quants might… but you, Mr. Retail McDumbMoney, don’t stand a chance.

[solumunus]

And it’s still nonsense. Many people beat the S&P and this meme needs to die. It’s considerably easier to beat the S&P when you’re not working at the scale of a hedge fund.

[solatic]

> the expectation that the stock will rise in value such that you can later sell it for more than you purchased it for.

If the person who holds the share can never expect to be paid for holding the share, then you're describing a Ponzi scheme. Eventually you cannot find another sucker willing to pay in even more.

> commodities

Are used as manufacturing inputs and thus a commodity investment injects liquidity in exchange for a return, should manufacturing demand (for those inputs) rise. Their intrinsic value derives from their consummability.

Stocks/corporations do not have intrinsic value beyond the sum of the fair market prices of the assets belonging to the corporation, should they be liquidated and dispersed among shareholders... which would be a dividend. At the end of the day the only reasonable means to price a stock is a calculation of expected dividends.