And Microsoft multiplied their profits a few times between 2000 and 2010 while their stock dropped 75%.

Valuations are important. Valuations are affected by the monetary policy/liquidity cycle. And Google's valuation is growing faster than any rational measure of economic value.

No, it dropped 75% in 2000 due to the dot-com bubble. If you started in 2001 you actually had a 60% gain by 2010.

January 2000 - $60 January 2010 - $30

I did just eyeball it from a few months before. And note, I said 2000...not 2001. And even at the end of 2001, it did nothing for a decade plus.

Stocks split. You can't just look at price. They also pay dividends.

What? Any price history you look at is going to be split-adjusted. And okay, you got a $1 of dividends...you only lost $29/share out of the $60 you invested.

They have, but why wasn't that growth priced in?

What makes you think it wasn't?

If it was established that they'd grow their revenues, then why was it still outperforming other asset classes by this much? Does Wall street have lacking models of how tech businesses grow? Or are people too risk averse to invest into tech?

What I don't get either is why quarterly reports in the current situation are so important for stock value in the current market climate, as in why did tech stocks soar so much after quarterly reports got announced? These numbers aren't showing anything other than how the companies perform in the current, corona-affected, economy and are not representative of how it's going to look like in a post corona world.

> why was it still outperforming other asset classes by this much?

Because the future is uncertain, and that uncertainty was baked into the price? And there's nothing to say that "baked into the price" has to be accurate... investors could have collectively read the tea leaves wrong.

> These numbers aren't showing anything other than how the companies perform in the current, corona-affected, economy

Which could be considered passing a stress test with flying colors - maybe people are interpreting this as "which businesses are robust or anti-fragile for a once in a century event". Or just as easily - maybe investors are betting there's a chance that some of this current context is the new normal.

I'm a little confused as to what you're trying to ask overall. Markets and investors aren't perfect, the future is uncertain, and random walks are everywhere.

Only some Wall Street firms use models to calculate cash flow and stock prices. A lot of them don't even care about such things. They just buy whatever has the most momentum, or whatever they think others love (Keynesian beauty contest), or whatever fits their thesis of the world.

I didn't say they weren't good businesses, they are solid, profitable and seemingly well run companies and it's why they are being used for shelter.

But let's not confuse profits, or market cap, with innovation or value.

I can see why you wouldn’t conflate market cap with “value”, but why not profit?