Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: BGR who wrote (62461)	6/15/1999 9:08:00 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 132070

BGR - (The market price reflects the average opinion and hence there is always diverse opinion of both sides of the spectrum. My point is that on the average over the long term the market opinion is the most accurate.) Average has nothing to do with it. The market price is determined instant by instant as being within the range that is both above the bid price of the most motivated, unsatisfied potential buyer and below the ask price of the most motivated, unsatisfied potential seller. Price is determined at the margin. The presence of potential buyers at one tenth the current price or potential sellers at ten times the price have no effect, whether they number one or millions, even though they may control the average opinion. In turn, these, and all other bid and ask prices, are the result of individual subjective valuations, subject to individual diminishing marginal utility with increasing quantity. The subjective valuation process includes all factors, both explicit and implicit, rational and irrational, which can affect the actual implementation of a buy or sell action by an individual. Price is equally determined by 'investors' who like the shade of red ink in the annual report, and those who calculate the cash flow of an aerospace company three years hence when 50% of the existing earth satellites will destroyed by a solar sunspot maximum in conjunction with the peak of the presidential election cycle. Intrinsic value is a meaningless concept, but varying degrees of correlation among the multiplicity of subjective valuations often give the appearance of a temporarily stable price. Regards, Don