points by bagacrap 20 hours ago | 0 comments
I would say actual value is created when the GPU is used to do something useful, like design a better bridge, or whatever, not when the GPU is bought or produced.
The accounting trick pulls forward the point of value creation, and relies on faith, if you assume "value" is supposed to be measured by "earnings".
Ultimately, investors can look at these earnings and decide to pay whatever they are willing to pay for equity in the companies. No one is forcing you to buy SP500 (except if you're part of a defined benefits pension plan). My point is that casual observers should not take earnings growth as proof that the economy is heading in the right direction. There are lies, damn lies, and statistics. And accounting. Msft seems to be pretty good at gaming the accounting fwiw! Financial engineering.
Even the value of the bridge is not realized until people cross it. It takes decades for such investments to break even, if they ever do - far longer than a GPU (which probably costs less than a mere boardwalk across a ditch).
Accountants are doing exactly what they should - every asset and liability is broken down by its market value (speculative) which investors then use to inform their speculation about the value of the company. If they think the company is more valuable than the current market price, they buy more stock. If you think the market value of a GPU is too high, don't buy it.
The market can be (and frequently is) wrong - but it's not an accountant's job to predict that.