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Just my thoughts #0834

There are two primary approaches to creating something: bottom-up design and top-down design . Top-down design is often seen in architecture. People do not build bricks randomly; instead, they follow the design drawings created by the architect. This method executes a plan that has already been established. When asked why something is built in a certain way, the answer is usually that the blueprint dictates its design. Conversely, bottom-up design does not start with a fixed goal, but rather involves setting and implementing small, actionable rules. For example, termite nests follow this approach. Small termites have a simple rule: to pile up soil. They do this without knowing the reason, but over time, the finished structure is remarkable and sophisticated. The appearance of the Sagrada Familia church , designed by Antoni Gaudí and still under construction, closely resembles a termite nest, differing only in size. Setting goals and planning is one way to create, but actual achievem...

Just my thoughts #0790

Liquidation Value : All valuations consider present and future values. Value is generated over time. It begins in the present and extends into the future. This ongoing value is referred to as continuing value . Countries, corporations, households, and individuals set current values based on the belief that the present state will persist. What happens if it does not continue? It loses its future value. This state is known as the liquidation value . For example, this occurs if you quit your business. Almost all investments involve buying and selling assets based on their future worth . If you buy at a price lower than the liquidation value, you make a significant profit. If you buy at the liquidation value, you pay a fair price. If you pay more, you risk overpaying or buying a bubble . Value depends on time. Continuing a process is key to valuation. - Joseph’s “just my thoughts”

Just my thoughts #0237

Online sales surpassed offline sales as a result of the global pandemic. Nowadays, people are purchasing signals instead of tangible items. The online environment is a web of signals. If the signal presented by the interface is not trustworthy, purchasing is not possible. For a long time, stocks have been traded based on signals that represent rights without requiring physical stock certificates. The same principle applies to gold. The challenge arises because both the tangible item and the signal react based on their value, but human greed leads to an oversupply of signals. This happens because creating a signal is much simpler than producing the actual item. The fundamental issue is that the signal serves as a representation of the tangible item. When there are more signals than tangible items, this discrepancy is termed a “bubble.” In offline contexts, signals are known as “cash.” Essentially, money is just a signal, and “trust” is crucial for believing in that signal. - Joseph’s “j...