AAPL
📉 Apple’s stock dilutions impact current shareholders by reducing the value of existing shares relative to the total number of shares.
💰 Financial asset prices often rise due to increased liquidity and monetary degradation, not necessarily due to improved fundamentals.
⚖️ The relationship between asset prices and monetary value is crucial; as the value of the currency decreases, asset prices tend to increase.
@Javierlinares:
“When a company, for example, Apple, issues new shares, it dilutes the current shareholders. It makes the shares they had, that they had first, before this new issuance, worth less, relatively, according to, or with respect to, the number of units of shares there are, right? It’s the same with the degradation of the currency. As the government spends and generates more units of that currency, the currency you already had in your wallet is worth less, even if there is no inflation. It is worth less. So, that makes the currency lose purchasing power slowly over the years, and that makes it more difficult for people to save, to spend, to invest, and it makes people increasingly think, or feel inside, ‘I don’t understand why I can’t make ends meet. I don’t understand what the reason is.’ But they do see it. So, it is very difficult for them to understand that, ‘Of course, you know what’s happening? Your currency is being degraded every time the government spends, and that’s why there are effects on financial assets.’ Many times, financial assets rise in price, not because the fundamentals have improved, but simply because there are more units of that currency. So, the formula is the price of the asset divided by the value of the currency below, which goes from 0 to 1, it is that value. So, when in that ratio, the currency is worth less and less and less in the denominator, that makes the division generate a higher result. That is the price of financial assets that rise due to the degradation of the currency.”
See in this exact part of the video how they talk about Apple:
View the video on YouTube.
Read more articles by the world’s top 100 analysts on Apple (AAPL) at the following link. AAPL stock.
