• unfreeradical@lemmy.world
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      1 year ago

      Speculation has been a relatively insignificant factor overall in the trade of stocks compared to growth in their intrinsic value.

      Stocks carry and accrue value due to the work of others than those who hold them.

        • rockSlayer@lemmy.worldOP
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          1 year ago

          All theories of value are lacking in one way or another, but you’re definitely in the wrong community if you fundamentally disagree with the labor theory of value. Intrinsically, an item has value based on demand and usefulness. However, no items exist without labor. The value of an item is disconnected from the wage exchanged to create it, and this theft of value is what we call “profit”.

        • unfreeradical@lemmy.world
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          1 year ago

          Speculation depends on a belief that value will rise in the future, which depends on, except in a few extreme cases of investors being scammed, the recognition of other value not speculative.

          Land speculators know that land has usefulness, for development, agriculture, or resources. Stock speculators know that stocks have value generated by work. Even if market value has some component that is speculative, always some component is due to intrinsic value.

          Your assertion, that “value of publicly traded stocks is based upon the speculation that the value of the stock will rise or decline”, is refuted by the contradictions it itself implies.

          An asset class whose value is purely speculative necessarily will collapse eventually. Generally in such cases the speculative value is generated through hype created by a nefarious actor who originally created the asset. Such is the nature of Ponzi schemes.

            • unfreeradical@lemmy.world
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              1 year ago

              A particular stock cannot be meaningfully considered overvalued if its entire value is speculative.

              Such is the contradiction.

              Perhaps you are not understanding speculation, confusing it with any investment purchase, any purchase based on expectation of rising value.

                • unfreeradical@lemmy.world
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                  1 year ago

                  I observed as follows:

                  Speculation has been a relatively insignificant factor overall in the trade of stocks compared to the effects of their intrinsic value.

                  Stocks carry and accrue value due to the work of others than those who hold them.

                  The following was your response:

                  That simply is not true. The value of publicly traded stocks is based upon the speculation that the value of the stock will rise or decline which is often not related to the productivity of the workers.

                  The notion that all value cones from labor is fundamentally incorrect.

                  It only confuses the matter further that you now offer as clarification, “I have never said the entire value is speculative”.

                  I believe the observations I have given, more so than yours, are generally accurate.

                  The price of stocks is supported principally by the value generated by labor, with speculation necessarily only a secondary effect.

                  The belief that value will rise is generally an accurate belief, because growth occurs from the value generate by labor. Such growth is not related to speculation.