The Fair Value Myth – DEUV

QUESTION: If metals are not trading at fair value relative to everything else, doesn’t that prove they are being manipulated?

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REPLY: Your problem lies in the assumption that everything must be sold at some fair value. This is consistent with the theory of random walks. ALL markets trade during periods when they remain significantly below fair value. It was the whole takeover boom of the 1980s that they also blamed me for because I had advised many takeovers. Then I just showed these charts showing in terms of book value that the Dow Jones hit bottom in 1977. The market was heavily undervalued because you could buy a company, sell all of its tangible assets, and double or triple your money. Michael Douglas’ famous “greed” speech in this film would not even be possible if everything was always being sold as some sort of mythical robot at a fair value. Everything misses and misses.

Metals DOESN’T MATTER. Every market fluctuates between UNDERVALUED and then strongly REVALUATION. This is part of the business cycle. If there were no periods of gross underestimation, there would be no sudden boom.

This is something you have to deal with. There is such a thing as a business cycle. Our cyclical analysis would not be possible if everything traded on a flat fair value line. This metal bullshit consists of people who were wrong and should blame someone else. It’s like blaming climate cycles on CO2. This notion of fair value has its roots, I hate to tell you, in Marxism, because it did not understand the business cycle either.

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