You know, every asset should be given a price in the economic results for the firm in question, and especially in the balance these values are apparent! But which prices should be used and why? Why is historical cost relevant when we are finding more modern balances in the world by using our prices for the assets, and the liability of assets?
So, what is the logic with CAPM – The Capital Asset Pricing Model – for all the assets that can be questioned about which value to use and why? You know, you should not be too optimistic in the accounting and doing too high values on assets, and you should not be too pessimistic by launching too low values on assets. So, the right value on an asset is finding the balance in the balance, and using a value on the assets that is correct in present time and in the future, and we should therefore find a realistic value!
You know, all the shares at the stock exchanges in different parts of the world, have their values, and many people like to make financial strategies about buying the price is low, and selling when the price is high, and we can be a rich man or a rich woman by using such an easy logic. And we can take our boat on the ocean and just wait until the price on the share in question has reached a high enough value, since we cannot know the top and the bottom for sure, since the reality is mainly operating in uncertain environments.
So, what is the efficiency in the financial markets? Well, it is the equilibrium of the prices for the assets, and we cannot change the use of the resources in any direction, and we cannot use too low or too high levels on them, since the prices are constant sometimes, and at other times the prices move up or down, and the prices in the long run are in equilibrium and the securities are changing their prices due to the curves, but this means that we can earn money both in the short run and in the long run, but there is often convenience and comfort in the markets, and like the earth and the sun, there is some logic out there, and we are using our intelligence and business acumen to find when we should buy capital assets, and when we should sell them, and financial strategies are the ways we are appearing the moves and the actions in the financial markets, and as with the weather, the crisis in the short run, implies a stable and convenient courses in the curves in the long run. And the nature and the human nature is always seeking equilibrium in the long run when being unstable and unpredictable in the short run, and that are the ways that the markets are operating.
So, how could you and I earn enough money to cope with the challenges that there are in our lives? Well, we should enjoy time, listen to sensible and reflected advice, and there are many people at home and abroad meaning having the best thing to try to avoid losing too much money, and the reality from rich to poor, or from poor to rich, that can be fast!
So, the stock exchanges show the development in the courses for the shares and for the securities, and we should be clever enough to cope with different people and with different firms, and there is much that should be done in the stock exchanges, and these are in the large cities on the planet, since there needs to be strong enough and large enough activity level to do business for the actors that are concerned and relevant, and economics is about making the values and the shadow prices on the assets, and if you could do alternative actions in relation to what you are doing today, what can be learned and earned from them, and which course is the most sensible to choose in the short run and in the long run, when we know that derivatives are econometrics and there are always stochastic processes and uncertainty in which ways that the courses are going, and they can go up, being constant, or they can go down, and this is the reality that we are trying to frame in the best ways as the prices have variations as all other things that are uncertain in the markets, and dynamics, growth, inflation and deflation are also about putting values on things that is happening.
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Kristiansand, Norway
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