Wednesday, January 29, 2003

With all the hyperbole about share prices in the news I was wondering if there's anything to worry about or if it's just the media's usual inability to understand anything remotely involving. And what does the share price signify if it signifies anything at all? I don't know about you but I struggle with the idea that something as structurally complex as a business or organisation can be reflected in a single number. You can measure the physical things like buildings, computers and paperclips but what about customer good will, the relationships employees have, the knowledge floating between the ears of said employees and the endless list of complex human interactions that take part in business. You can't, honest…lots of people have tried. So if it can't indicate the real value of a business then shares must simply be part of an elaborate financial game that serves no useful purpose other than to keep a bunch of slack jawed, stripy shirted wearing hoorays busy during daylight hours. So not only do shares not give any indication of the real value of a business but we use this system as an economic tool to establish how well we're doing. Is it just me who thinks this is bonkers?

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