Re:GameStop Is Rage Against the Financial Machine
by FabHK on Wednesday January 27, 2021 @10:41PM
(#25937850)
I'd say that it's always been about the long run; however, with (real) rates around, say, 5%, as in the 90s, what matters for the present value is mostly within the next 20 years. With rates about 1%, what happens after the next 50 years still determines more than half of your PV.
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Re:GameStop Is Rage Against the Financial Machine
by rory on Thursday January 28, 2021 @10:04AM
(#25942810)
Do investors really think they can predict the income of a company in the 2070s with ANY degree of accuracy? None of the top five companies by market cap even existed 50 years ago.
Re:GameStop Is Rage Against the Financial Machine
by FabHK on Thursday January 28, 2021 @09:13PM
(#25952776)
That's my point - with high ("normal") interest rates, your horizon becomes shorter, what happens in 30+ years doesn't really matter, and the fundamental value of a share should become visible more quickly, so the uncertainty now is lower. With rates near zero, what happens in 50 years still matters, so who knows what the share should be worth today?