9 ms·
Roughly -- The value of an asset depends on who can use it. When two parties agree to an exchange, it suggests that they both valued what they ended up with mo
by systoll 9y ago
Roughly -- The value of an asset depends on who can use it.
When two parties agree to an exchange, it suggests that they both valued what they ended up with more than what they started with.
- drabiega 9y agoThis assumption breaks down for most financial assets. Both parties still think that they are gaining value, but one of them has to be wrong.
- mattmcknight 9y agoThis is completely wrong. I sell stocks because I need cash. I make a loan because someone else needs cash. Liquidity preferences matter, volatility preferences matter, both parties can gain value.