Your Money's Real Worth

What is value?

When you look at a Php 100 peso bill, do you see a piece of paper, Php 100.00 in your hands, or your ticket to a Jollibee meal?

As I've become more and more sensitive and observant of the ways the world works, I have come to realize that this thing called money is a product of general valuation. General what?

With each passing year, tasks and things become simpler and easier to do due to continuing developments in technology. But for money, now that's another thing. It becomes more and more complex with the addition of newer and more sophisticated financial products - futures, options, forex, reits, derivatives, and of course the mortgaged backed securities - products taht are not available in the Philippines. Don't go researching about them either, I don't suppose they'd be in these here shores until maybe the end of this decade.

Last year, the estimated total losses of the subprime mess in the US was at the $480B range. $480B. Think about that. Try researching for the latest count.

My question is where did the money go?

Similarly, in the stock market, what is the value of a piece of stock certificate? The stock's par value? The cost to manufacture one certificate? The prevailing market price of the stock?

The answer to these questions are diverse. My answer is this question - who assigns a value to a stock?

Mathematics and semantics come into play here. People say supply and demand. Critics and stock market doubters call it pure speculation.

At the end of the day, the only thing you hold that is tangible and that has the right value is the paper bill you have. Yet this can also lose value, ask any OFW and he and she will tell you what it's like to feel "currency exchange losses".

What I'm trying to state here certainly isn't something you think about often.

But the gist of all this is, as long as you don't cash in or cut loss on what you hold, whatever the value it is, whoever assigns one to it at any given time, will always remain for as long as the representative object of that value is still with you.