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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