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If every investment became risk free because of perfect information about the future, it would likely increase the total market value by quite a lot.
by RandomLensman 3y ago
If every investment became risk free because of perfect information about the future, it would likely increase the total market value by quite a lot.
- rpigab 3y agoOr decrease, because who would go to the casino if everyone knew the outcome? Only the owners and staff. "Useless" companies are part of the total market value. If they never get any funding, that's less value overall. Even if that translates to more value for "useful" companies. Also, if you know with absolute certainty from the beginning that Apple Inc is going to be worth X billion dollars, then you never get to buy stock at less than X billion dollars, because everyone has the perfect information. Value would be constant, and investors would get exactly zero return, because zero risk. There are other variables, how long it will take and how many people can afford to fund it from the beginning and for that long, of course.
- RandomLensman 3y agoYou could calculate the value of things under the discounting changes. The idea of perfect foresight of the future is kind of insane anyway. Not sure why all of sudden we would go back to believing in a deterministic universe.
- aeternum 3y agoThe universe can be both deterministic and mostly unpredictable. In fact it most likely is both of those things. Entropy bounds computation and prediction of chaotic systems requires extreme amounts of computation.
- RandomLensman 3y agoOur current understanding puts some things into the category random, could be wrong, of course.
- alephnan 3y agoPeople still buy airline stocks
- ativzzz 3y ago> because who would go to the casino if everyone knew the outcome Everyone knows the outcome of casinos - the house wins in the long run. People still go because they think they have a shot of wining in the short run. People like gambling