Kay on the theory of value

Brilliant summary of the interaction between differing preferences and judgements in error.

“Wherever there is uncertainty, market prices reflect the beliefs of those who are more than averagely sanguine. The result is a reserve of illusory value, constantly depleted by events and replenished by fresh uncertainties. That is why markets display a systematic propensity to boom and bust.” Extract from FT.com—It may be a Rembrandt to you, but markets can beg to differ

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