PRENDOLOGYPrendology is the body of laws, based on human nature, that tie together the value and the price of marketables.

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A marketable is any object, service or deed that has a perceived value on a market. Marketables can be sold, exchanged or transferred, as well as created, destroyed or stolen and found.

Beyond physical goods and services, examples of marketables include assets and obligations, such as:

• Stocks, bets, tickets, leans, heritage, certificates (of membership, or options);

• Contracts, deeds, mortgages, and notes;

• Patents, trademarks, trade secret, rights (hay, mineral, of-way, etc.) and more

Related websites:

Soros-Conjecture.comSell-Rights-Here.comMises.org

Related authors:

Carl MengerEugen von Böhm-BawerkLudvig von Mieses

Definitions:

• Marketable (see defined above)

• Value = Perceived use or usefulness of marketables expressed in money terms or the emotional or logical perception of the measurement of a benefit provided by a service, asset or a deed.

• Price = The money a buyer pays for a marketable.

• Asking Price = The price the seller asks for a marketable.

• Paid Price = The price the buyer paid for a marketable.

• Bias = Mental inclination or aspiration related to buying decisions. For instance: want, need, uncertainty, greed, fear and many more.

• Appreciation, appreleration, wealth and more (see below)

Concept

• Price is observable and real, while value is non-observable and imaginary.

• The price depends on the value, not vice versa (i.e., value defines price).

• Value solely depends on biases, which are intangibles like opinions.

• Biases are time related on the 0th, 1st and 2nd order.

• Markets are inherently deterministic, even when chaotic by nature.

• Predicting future price from past price history is unreliable.

• Predicting price trends from trader biases are dependable.

• Predicting future market price from past market price history is unreliable.

• Predicting market price trends from market biases is dependable.

Principles (1-4)

1. The value is intangible. It exists only in the traders’ mind. It materializes (becomes tangible) when the buyer pays in full. Thus, the price is buyer defined (i.e., not defined by the seller), at least as long as the buyer can voluntarily refuse buying without consequences, because the market is non-coercive (free) with voluntary traders.

2. The buyer’s biases—and nothing else—define the paid price.

3. Those biases are time related on the 0th, 1st and 2nd order to the time derivatives of the price.

4. The higher than 2nd order time derivatives and biases are negligible.

Principles (5-8)

5. The three biases define three components of the value.

6. These three components—and only these three components—add cumulatively to the instantaneous value.

7. The value can be influenced by asking price and news on the marketable.

8. Money is a unique commodity—and nothing else but commodity—in which the price is paid. Its value is also intangible, even if it is non-fiat, e.g., gold or silver, since value is imaginary. Fiat money is not money but legal tender with artificial mandatory value.

Laws (1-4)1. For every seller’s valuation exists a buyer’s counter valuation, which

is equal and opposite when the price is agreed upon to be paid (not necessarily when it is paid in full).

2. 0th order [need] bias: Price is proportional to value. Higher valued goods are expected to be priced higher and vice versa.

3. 1st order [uncertainty] bias: Appreciation is proportional to value. Higher appreciating goods are expected to be priced higher and vice versa. (Appreciation is the price velocity.)

4. 2nd order [fear] bias: Appreleration is proportional to value. Higher apprelerated goods are expected to be priced higher and vice versa. (Appreleration is the time rate of the appreciation. It is the price acceleration.)

Laws (5-8)

5. The sum of the 0th, 1st and 2nd order biases defined value components is equal the time dependent news value, which however can be nil.

6. The sum of the 0th, 1st and 2nd order biases defined value components, which are dependent on the difference of the asking and paid price, is zero.

7. The product of the 2nd order bias (fear) and the 1st order price derivative (appreciation) is conserved in any trade (invariable).

8. The 1st order price derivative remains constant as long as the 2nd

order price derivative is zero, while the price is constant if the 1st

order price derivative is zero.

Corollaries (1-8)1. Trades are inherently periodic. The period is solely trader biases defined.

2. Free markets are inherently cyclical. The long repeat period is defined by the cumulative price of ownership and the inflation creep rate.

3. Wealth is the product of value and price, thus it is intangible.

4. Supply and demand do not define the price, though influence it.

5. Function and cost do not define the price, though influence it.

6. In a chain of commerce (resale commerce), the 1st trader’s biases influence overall response predominantly and with that, the final price.

7. In that chain, the first and last trader gains or looses the most.

8. In resale commerce, local/temporal actions cause only local/temporal effects.

“The value in time is the time in value”

"Money never starts an

idea;

it is the idea that starts the

money" - W.J. Cameron