Enunciados de questões e informações de concursos
The concept of fundamental or “intrinsic” value was also understood by players in the early stock market, although misleading prospectuses, the manipulation of share prices, and the stock market boom made its discovery an even more difficult task than usual. After the 1690s boom, Daniel Defoe (of Robinson Crusoé fame) stated that many stocks had been raised above their “intrinsic value” and that shares in the East India Company had sold at between 300 and 400 percent above their nominal value “without any material difference in intrinsic value”. The contemporary land-bank projectors, who wanted to replace a gold-backed currency with one supported by the value of land, even realized that the notion of “intrinsic value” was an oxymoron*, since “intrinsic” suggested and inward quality, while “value” was always external. For instance, Nicholas Barbon argued that “things have no value in themselves, it is opinion and fashion which brings them into use and gives them a value”. John Law, who was also a land-bank projector, went even further and claimed that price was simply the result of the interaction of supply and demand. Applied to the stock market, Law’s idea suggests that share prices are determined by liquidity (the supply of new funds to the market) rather than a reflection of inherent values.
* Note: Oxymoron (oximoro em português) “is a figure of speech in which opposite or contradictory ideas are combined (e.g. thunderous silence, sweet sorrow)”. Webster’s New Dictionary.
According to the text
Item 0 the understanding of the concept of intrinsic value was made more difficult by misleading stock market prospect, manipulation of share prices, and the stock market boom (of the period).
Outras questões do mesmo concurso: ANPEC / ExSN (ANPEC) / 2005
