> No matter how you look at it, Hertz stock currently is worth zero. When street price of an asset is higher than its intrinsic value
The only intrinsic monetary value of a thing is what someone else will give you for it (or what people give you for owning it, like a dividend or rent or whatever.) It doesn't matter why they'll give you that for it, only that they will.
Otherwise how do you explain the value of for example a fine art painting? What do you think their ordained true intrinsic value is? Are all paintings permanently in a bubble?
What are Hertz stocks worth? About 2.83, because that's what I can sell them for.
If you owned a hundred thousand Hertz stocks right now would you just throw the certificate away because they're worthless?
There are a lot of different definitions of intrinsic value. But it often has nothing to do with how much someone will give you.
There is the asset, an estimation of what the asset is truly valued at (intrinsic), and then finally the market price. In the case of the painting, the intrinsic value might be a function of a study of trends in demands of paintings, the artist, etc. The market price may or may not correctly factor in that information to price the painting well.
The fact that insider information does exist should paint a clear picture of why someones calculation of intrinsic value might be different from the market price.
Lastly, if someone gave me Hertz stock, I'd sell it ASAP and invest the money in something else.
> Otherwise how do you explain the value of for example a fine art painting? What do you think their ordained true intrinsic value is? Are all paintings permanently in a bubble?
I think the answer is yes.
Does that say more about fine art, or about the definition of a bubble?
The only intrinsic monetary value of a thing is what someone else will give you for it (or what people give you for owning it, like a dividend or rent or whatever.) It doesn't matter why they'll give you that for it, only that they will.
Otherwise how do you explain the value of for example a fine art painting? What do you think their ordained true intrinsic value is? Are all paintings permanently in a bubble?
What are Hertz stocks worth? About 2.83, because that's what I can sell them for.
If you owned a hundred thousand Hertz stocks right now would you just throw the certificate away because they're worthless?