To geek out on one of my fav niche subjects: markets & prices!
I am valuation relativist, IMO Markets are about myth making & prices the reflection of the current dominant myth
Or, value of X is because more people believe whatever story has gotten X to the price it is at 1/
I am valuation relativist, IMO Markets are about myth making & prices the reflection of the current dominant myth
Or, value of X is because more people believe whatever story has gotten X to the price it is at 1/
For Wall Street, that could be a mathematical model (hip in 90s), momentum model, cash flow model, flow model, or whatever framework currently is in vogue
That doesn’t mean value is entirely a Wild West. There are objective things you can say about different assets value 2/
That doesn’t mean value is entirely a Wild West. There are objective things you can say about different assets value 2/
Different assets have different boundary conditions that constraint prices in space & time.
Bonds eventually mature to 1 or 0, stocks are legal claim on % company, etc
At an extreme end is art, which is completely unbounded & in that sense the most pure market. 3/
Bonds eventually mature to 1 or 0, stocks are legal claim on % company, etc
At an extreme end is art, which is completely unbounded & in that sense the most pure market. 3/
Then there is National currencies, which do have a boundary.
While they are no longer convertible into gold, they are convertible into “being able to physically reside in a regime”.
You need dollars (at some point) to live or do biz in US. That tethers it to US prospects. 4/
While they are no longer convertible into gold, they are convertible into “being able to physically reside in a regime”.
You need dollars (at some point) to live or do biz in US. That tethers it to US prospects. 4/
Laying somewhere between national currencies, or fiat (which are tethered or bounded by the nation that issues it & whose regulatory body it can be used to navigate) and Art (which has zero guide to value beyond what market says it is) is Crypto. 5/
I think it is more like Art than Fiat, which is not a subjective statement. It is what it is, & art has a great capacity to maintain value.
Art markets are the most fascinating of all markets and don’t get the due respect they deserve. They are unbounded markets & insightful 6/
Art markets are the most fascinating of all markets and don’t get the due respect they deserve. They are unbounded markets & insightful 6/
To me the most fascinating questing is what Walter Benjamin wrote about in “The Work of Art in Age of Mechanical Reproduction”.
What is unique, or valuable, when anything can be replicated? Why buy an original when the Knock off looks exactly same? why buy a signed photo? 7/
What is unique, or valuable, when anything can be replicated? Why buy an original when the Knock off looks exactly same? why buy a signed photo? 7/
To end. This isn’t a statement about cryptos prospects.
It is a reminder that anyone telling you X should be at Y price, is doing their job of trying to get their myth established!
anything can go to almost any price, & nobody really knows squat. Especially experts!
8/
It is a reminder that anyone telling you X should be at Y price, is doing their job of trying to get their myth established!
anything can go to almost any price, & nobody really knows squat. Especially experts!
8/
Addendum: What Art markets show is in the end markets are built on Faith.
Why does an original Jackson Pollock trade at 40 million when a knock off you can’t tell difference, trades at $ 1,000?
Becuase original captures the moment of creation, the aura. The authenticity
Why does an original Jackson Pollock trade at 40 million when a knock off you can’t tell difference, trades at $ 1,000?
Becuase original captures the moment of creation, the aura. The authenticity
Ironic aside: The most secular rationalist (libertarian free market types) are committed to an institution (markets) built around importance & value of Faith.
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