I think the idea of value is a lot deeper than the article presents. There's a whole train of thought from the physiocrats to Marx and subjective utility that i

I think the idea of value is a lot deeper than the article presents. There's a whole train of thought from the physiocrats to Marx and subjective utility that isn't easily summarized. Suffice to say it's not informative to separate fundamental value as some kind of clear thing. Liquidity is about how easily you can turn the asset into something fungible (like money) without giving up too much. You can give me your house for 50% under the market value today if you like, or you can wait half a year for someone to pay full price, houses have this issue of mostly being illiquid. If you had shares in a company like Google, you could dump them on the market and recover the price of a house without a huge drop in the amount you'd get. So how liquid are software skills? Well let's suppose you're a dev who normally would get paid $200K a year. How would we come to a number about how liquid that skill is? One way might be to think about how long it takes to get a new job. Currently, it's not long at all. Maybe a couple of months, three? So if you were out of work you'd miss out on 50k of salary until you got your job. But also that's a flow of income, not a one-time capital payment like the house or the shares. Your job would probably last 5 years and thus pay $1m? So a 5% liq cost for searching as a first guess. (We can add wrinkles like interest rates, increasing salary and salary uncertainty later).