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.

Pastimes : Austrian Economics, a lens on everyday reality -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (79)	12/17/2001 4:03:01 PM
From: TimF	Read Replies (1) \| Respond to of 445

I think one of the beliefs of Austrian economics is that the value for an economic good is entirely what it worth to people who might buy it. Well the people who were interested in 3COM where not the exact same people who where interested in Palm. The two groups of people could have a different opinion about the value of Palm. This could be because they have different opinions about the future value of Palm's earnings, or just because they figured that they could sell Palm to someone else for a greater amount of money even if the valuation was already to high (greater fool theory). Also some investors might think that eventually Palm will generate a lot of money but that before that happen 3COM will have sold a lot of it's shares before the future runup, so 3COM shareholders will not get the full eventual value of Palm. Of course you would expect to get a number of people who went long 3COM and short Palm in this situation which would tend to increase 3Com's price while lowering that of Palm. But if the trade doesn't work short covering could drive the valuations apart again. Use Austrian Economics to explain the inability of SI to accept a post without returning an error message, or more likely one of an infinite series of randomly selected error messages. Or not so random. declining resources for properly maintaining SI (and properly testing all changes) because of the fact that SI is not profitable. Tim