Microsoft stock has BLOWN up in the last 10 years alone- went from a $400 billion market cap to $3 trillion.
I still have the same question as before.
I understand how inflation works and I understand how market caps work, but not necessarily the extent to which they work together.
I'm wondering how inflation affects market caps, and if it does, then how much? Seems like if inflation means prices of goods increase, then so would the price of stocks.
So when Microsoft, Tesla, Amazon, etc. shoot up, how much is because the companies gained real economic value, and how much (if any) is due to inflation? It strikes me as not coincidental that these net worths have shot up over the same time as inflation skyrocketed. (I understand there was a large xfer of wealth to the uber-wealthy in that same time frame, which would go under the "gained real economic value, 'cuz we forced it" category.)