Tuesday, July 13, 2010

Humans and Financial Markets

A closer look at the social relations and the financial markets will reveal an interesting similarity.Everything happens for a benefit and the deal is either overvalued or undervalued. People and stocks;both are either over or under priced.
Person A invests time and emotions in a relationship with person B solely based on the net worth of person B. The net worth can be thought of in terms of wealth, fame, happiness or EQ.Most people will judge person B on basis of CURRENT net worth.
Networking gurus, politicians, etc., will invest in person B based on the POTENTIAL worth and CURRENT worth.
Now, how is this different from the financial world ?

I say, that a person can be overpriced or under priced because if a person is overpriced in one group of people he/she may not be thought of highly in another group of people.
Think of this on a larger scale in terms of international and emerging economies markets.

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