I Am Mine

Wednesday, July 06, 2005

Human Stock Markets

Perceptions is the only reality that exists; things or people how they appear or the kind of vibes we feel about them allows us to pin prices on them in the security market of humans. From a layman’s perspective stocks of listed companies appreciate based on the future expectations of their cash earnings. The future cash flows are dependant on any major projects outlined for the future, the industry outlook in which a company operates etc. Further one of the core fundamentals influencing stock prices is information asymmetries which exhort insider trading, which at a superficial level means that if someone knows some secretive information pertaining to a company which is yet to be made public he/she can move the stock market with a frenzied buying or selling, commonly referred to as the herd mentality. Picking threads from the analogy started, what is amazing about the human stock market is that every one of us not only trades in human stocks but conversely is up for buying and selling as well.
Human stocks are listed on many bourses exposed to various buyers and sellers who based on how they value the individual price him/her. For instance back at my business school most classmates of mine were being exposed to each other for the first time and affinity groups had to be created. ‘Looks’ aka visual information plays an important part when in the price function of a stock when pricing it by an individual. Some would attribute a lower weightage in the overall function but the argument being made is no matter what stock market we’re talking about, visual data does influence. Sense of humor too is a major determinant of price as well, everyone loves an amiable person and an amicable person is valued more as opposed to an abrasive one. The human stock prices here too have an element of variation akin to when PPL decides to do offshore drilling its stock price suddenly hits the roof. You might be someone who’s redefined what being a looser is but one right stance against your boss, putting your job in jeopardy, suddenly makes you a hero. A hero who at a minimum, from no where is part of a casual lunch discussion and is respected.
Towards the end of my degree I got to know so many people and realized since they were the quieter ones I never got to know who they are as public information did not capture that. This is the information asymmetries I was talking about earlier where stocks are under priced just because they do not move in popular groups, are not into sports etc but chance long coffee gup shups in the cafeteria make you realize they have more depth in them and share your values and thus you suddenly price them higher.
Moving on to a different exchange such as arranged marriages, the information disconnects are so huge thus parents inquire from others the kind of family the aspirant individual comes from etc. The parents’ price the individual based on his potential for future earnings if it’s a male in question. If he has a sound education, is ambitious, works in a good company and other factors all go into finding the highest priced stock from the ‘marriage exchange’.
Every individual has his/her own set of stories that define who he is at any given point in time but the market, oblivious to their circumstances scalpel values them in the scale of judgment and opinions. Those who have an eye to look for the truth behind the façade buy under priced stocks yet are the richest amongst us with the right few friends, a soul mate or brilliant employees.

3 Comments:

At 6:51 PM, Blogger M K Abbas said...

well to find growth stocks who sometimes have to move out of the S&P 500 or the KSE100 and use your head for a less valued stock.
Your marriage analogy reminds of the explanation a prof had for role of synergies in M&As
Finally, visual appeal may influence "ASSET VALUATION" in HSX (Human Stock Ex.)

:D
Cheers
MKA

 
At 9:47 AM, Blogger ~meyum & a half~ said...

this particular blog of yours went right over my head:)but anyway thanks for dropping in:)i liked that saying

 
At 12:43 PM, Blogger ~meyum & a half~ said...

i didnt mean the genral content but the moment somone says stock and market(in any context mind you)in the same breath ...im a gonner;)
dont dont dont say anything to MACHUS..he will officially kill me i tell you man..no no no..have mercy on fellow blogger..wont you??:)

 

Post a Comment

<< Home