![]() The environment in which you are selling makes a big difference. For it is one thing to value your asset by reference to the prevailing price at which other people are buying and selling assets like yours - while at the same time not selling yours, remaining on risk to its forward price - and quite another to crystallise your gain and actually sell. Observing someone else’s sale does not count as interacting. The very act of interacting in the market changes the market. This has something to to with observation dependence: an expression we made up, but which owes something to systems theory and even quantum indeterminacy. When you do need it, mark-to market valuations have a horrible habit of turning out to have been quite badly wrong. When you don’t really need it, it is there for you, regular as clockwork. As has been demonstrated time and again - Enron, the Global Financial Crisis, Archegos - the market is an inconstant friend. In financial markets one can do without a firm bid for your own asset if there is an public market for assets exactly like your one where one can see trading prices every day. ![]() If a market bid is “ firm” and the market liquid then however estimable your fundamental valuation techniques, you can’t argue about a market value. They may, however, be surprised to hear there have been many financial professionals - ones who, similarly, should not have be surprised to hear that - who, in fact, have been surprised to hear it, and have had the frights of their lives finding it out the hard way over the 30 years since mark-to-market accounting became de rigueur - re-popularising itself in the hands of accounting wizards like Jeff Skilling and Andrew Fastow in the 1990s, President Roosevelt having banned it, at the SEC’s urging, as long ago as 1938. Regular readers will not be surprised to hear that this can lead to confusion, disappointment and colossal regret. In the absence of a better idea, it is to treat the value of something you have not sold as if you had sold it. “Marking-to-market” is a method of accounting to value an asset. Relationship with famous French financial markets chocolatiers Les Frères Maple unclear. Also a fully trained facilitator and speaker. With over 70 Gold awards under his belt and Category winner of several esteemed awards over the years, Marc Demarquette ( ) has raised the bar higher and higher, being driven by results with no better way of demonstrating his excellence than winning awards for his creations and his clients. A British born serial award-winning Chocolatier and proprietor of Demarquette Fine Chocolates. The latter involves ineffable wisdom, technical analysis and cojones of steel - and at times of stress is apt to make an owner feel aggrieved at the world the former is a bit like sticking something on eBay - hence, “ marking-to-market” - and yields an instant answer if not necessarily gratification.Ģ. The market value is the value of an asset by reference to its market price - what the market will pay for it at the particular point in time, rather than by evaluating the fundamental components of the asset. ![]() Comments? Questions? Suggestions? Requests? Insults? We’d love to hear from you. ![]()
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