A Quote by Michael Mauboussin
People are, by and large, quite poor at judging correct absolute values but are astute about determining relative values. Psychologists call this coherent arbitrariness, which suggests that individuals are coherent when they compare prices on a relative basis but arbitrary when those prices are considered versus fundamental value.
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Those who have no absolute values cannot let the relative remain merely relative; they are always raising it to the level of the absolute.
Fundamental analysis seeks to establish how underlying values are reflected in stock prices, whereas the theory of reflexivity shows how stock prices can influence underlying values
Both light and dark are eternity. Human beings assign relative values to colors, but beyond the relative, there just is - what in Zen we call "suchness".
One common way of judging whether housing's price is in line with its fundamental value is to consider the ratio of housing prices to rents. This is analogous to the ratio of prices to dividends for stocks.
The question is really how do we think seriously about this mechanism called a market. It ought to be determining not values but prices.
Poor is the man who does not know his own intrinsic worth and tends to measure everything by relative value. A man of financial wealth who values himself by his financial net worth is poorer than a poor man who values himself by his intrinsic self worth.
What we often take to be family values--the work ethic, honesty, clean living, marital fidelity, and individual responsibility--are in fact social, religious, or cultural values. To be sure, these values are transmitted by parents to their children and are familial in that sense. They do not, however, originate within the family. It is the value of close relationships with other family members, and the importance of these bonds relative to other needs.
There is no doubt that the Fed's large-scale asset purchases have caused major increases in a number of asset prices in the economy. This is especially true of mortgage backed securities and corporate bonds, and quite possibly of equities as well. For those people and institutions holding those things, the run up in prices has been a wealth bonanza.
To measure prices by a currency that is called by the same names as gold, but that is really inferior in value to gold, and then - because those prices are nominally higher than gold prices - to say that they are inflated, relatively to gold, is a perfect absurdity.
I look to Islamic ethics to find something that can provide the basis for shared values with other traditions, and ultimately universal values. This ties into the point I made in a book, 'The Quest for Meaning', that the only way for values to be universal is if they are shared universal values. My main point is, in this quest for value the aim is not to express your distinctness from others, but about being able to contribute to the discussion of universal value.
Allah is in Himself the non-being and the being, the inexistent and the existent. He is at the same time that which we designate by absolute non-being and by absolute being; or by relative non-being and relative being. . . . All these designation come back to God alone, for there is nothing which we can perceive, know, write or say which is not Him.
A considerable proportion of the developed world's prosperity rests on paying the lowest possible prices for the poor countries' primary products and on exporting high-cost capital and finished goods to those countries. Continuation of this kind of prosperity requires continuation of the relative gap between developed and underdeveloped countries - it means keeping poor people poor. Increasingly, the impoverished masses are understanding that the prosperity of the developed countries and of the privileged minorities in their own countries is founded on their poverty.
We think of prices as simply the notation of how much we must pay for things. But the price system accomplishes far more than that. Hundreds of millions of people buying and selling, and abstaining from buying and selling, generate a system of signals - prices to producers and consumers about relative scarcities and demand. Through this system, consumers can convey to producers their subjective priorities and entrepreneurs can invest accordingly.
Who can complain about the price that Google is charging you? Or who can complain about Amazon's prices; they are simply lower than the competition's. And that's why I think we need to shift back to a more Brandeisian conception of antitrust, where we consider values other than simply efficiency and low prices.
The idea of being in the desert is fundamental, but it's totally relative, and it's about that membrane: the way that one defines self versus the environment.
A modern theory of knowledge which takes account of the relational as distinct from the merely relative character of all historical knowledge must start with the assumption that there are spheres of thought in which it is impossible to conceive of absolute truth existing independently of the values and position of the subject and unrelated to the social context.
