Comment by _delirium | Hacker News Reader

Comment by _delirium | Hacker News Reader

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A business is valuable to own if you think it may bring you more money in the future, or you think that owning it will give you an advantage over your competitors. That's it. That's the entire thing.

I don't think that's accurate; that assumes that 100% of businessmen make 100% of decisions purely to make more money, which I don't think is true. If you have a big pile of money, one of the things you can do with it is buy or start companies that you think will make you more money, but other things you can do include buying/starting companies you think will advance your personal goals, buying companies you'd just like to own, etc.

For example, we have a lot more wealthy tech people owning space-travel companies than I think would be justified based on the economics alone. They consider them valuable to own because they want to own a space-travel company. Similarly, there is some non-zero value, beyond its projected revenues, to owning the New York Times. I would certainly pay a non-zero amount for the social power it would gain me to own the NYT, so there you have an existence proof that the value of its social position is at least a few thousand dollars. :)

A more accurate version is:

> A business is valuable to own if you think it may bring you more value in the future […]

The mistake is conflating money and value: money can be a value, but other things, like riding into space, the prestige of owning a paper, and general quality of life are also values. A decision makes economic sense if the value you gain from it exceeds the value you give up to get it, regardless of the form those values take.

This has been shown to be true for sports teams. People buy them for more money than the underlying business is worth because they want to be the next Mark Cuban, George Steinbrenner, etc.

You make a good point - there really is no way to fully disconnect the human element in these decisions.

I do think there's a real difference between Jeff Bezos/etc founding a space-travel company and Facebook buying Instagram, however. Although Mark Zuckerberg is at the top, Facebook is a large organization, with likely more complex motivations than any individual.

To what extent does it even make sense to speak of the "motivations" of a group of people, insofar as they aren't unanimous? Has anyone done a study on whether this provides any predictive power? It seems plausible to me that a group's "motivations" are just stories about what people in the group did.

It always felt to me like Teslas's entire existence is based on this:)

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