The Five Principles
Maham Khan
Week 1
Top of Form
The article that I found highlights principle 4 which says that market prices are usually right. A concept that goes along with this principle is the idea of an efficient market which says that market prices reflect all available information at any moment in time. An applicable way to understand this is through stock value. Stock prices are useful indicators of the value of a firm and thus it can be interpreted that changes in stock price indicate the value of what may be currently offered by the firm. The article highlights certain stores that saw an increase in shares such as Target and Lowe's. These stores were and continue to be very popular stores amongst the general public especially during the time of quarantine. The changes in values reflects the increasing demand for the firm.
Romualdo Ancog
Week 1 Discussion Board
The article I found was, "Airbnb has been brutalized by the pandemic, but will IPO anyway in 'forgiving' market." This is an interesting article because it talks about how the company Airbnb is massively valued, 11.3 billion. Still, over the previous year, they took substantial hits with their revenue falling nearly 70%. The first core aspect of finance, shown in this article, is the fourth one: market prices are generally right. This article outlines the concept of market prices by even though the company is doing poorly currently, the market expects them to do better in the future. Therefore the market price does not decrease. This new clearly shows how markets are preemptive and often looks to the future about future possibilities.
Bottom of Form