AMC is having a wild ride today after announcing they’ll give out free popcorn to shareholders. Finally there’s a reason to buy the stock. At $10 a tub, if you go 5 times a year, the stock is now worth $500 a share.
Perpetuity formula: ($10*5)/(.1) = $500
Grab your popcorn!
The last 24 hours has seen many of the, what I will charitably call, speculative stocks (and other assets) have large corrections. With I’m not sure the party is over, this is likely a trend to continue.
This is a graph of the ratio of the NASDAQ Composite to the Dow Jones.
Even after yesterday, the DJIA would need to outperform the NASDAQ by 67% (!!!) to get back a more normal ratio.
Could it be different this time? Maybe….. but I’d take the DJIA over the NASDAQ the next few years.