So I'll pay 2 per share, which is a little bit of premium over the market value at the time, which was 1.

It's the best price that someone's willing to give you for something.

And this is very relevant to what's going on in the world today.

So we have to be careful.

So that's fine.

So 5 million divided by 1 million is 5.

So let's call that market equity.

So maybe I have a a billion of these CDOs.

Because we know that the book value per share is 5.

Strict ISO compliance

And these are the same people now, they're very adamant, that says, oh don't believe the market price.

And this calculation, this multiplication of market price per share times the number of shares this is called the market cap

And with that, there's gonna be some electricity and stuff, we won't count all of it..you can produce some cotton. Just the plant cotton. Some raw cotton.

But let's parcel it a little bit more, cause these terms can be interesting.

Our price is considerably higher than the current market price.

I think that's what I wanted a write here, market value of equity.

He sells that share and he gets 100 for it.

The market drop has cleaned me out.

I'm going to make money that I otherwise wouldn't have made.

So the first one I'd like to parce is the idea of market value.

So using FrontlineSMS they were able to group people into different categories and these people included farmers, who might want to know the coffee prices in different markets,

So I'm willing to give you 1 billion for those CDOs.

I'm just making up numbers.

Here, what multiple are we paying?

Enforce strict ISO compliance

So if you have a help at home, if you go to the doctor, the market value of all of those things are going to be put into GDP.

They're arguing that the few people who transacted did it out of desperation.

It's very simple. It's cost plus markup.

Anyway, fair enough.

And so microeconomics is how do people decide where to put those scarce resource, how do they decide where to deploy them.

And that tells you that the book value per share is 4.

Now in the next year maybe there's, whatever, demand for avocados goes down or whatever and people pay less for it.

So what's leftover?

With this price, your product would not be competitive in the Japanese market.

let's say that they are traded in some market.

And then I could take this 30 worth of cotton fabric plus some more labor so let's say another 5 of labor and

Because when the company needs to raise money, that is used as kind of the fair market value of a company's shares.

I love Lego Mindstorm, is which a wonderful way to experiment with these things.

And 3.00 per share times half a billion shares, that's a 1.5 billion dollar market value of its equity.

So what's eventually going to happen with the demand increases the price will go up in this market and when the supply increases in this market, the price will go down.

I actually wrote that down here.

And the best thing that we as humans have been to be able to come up with is a market.

But let's not get too complicated right now, I'll do a bunch of videos on that.

What would be left over if I were to liquidate at the market price, if I were to sell the house at the market price?

The price of admission.