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Re: Meteorite "worth" (warning: long and opinionated!)

Gregory:
<< Everything's worth is determined by supply and demand.  The cost of
 >production/extraction is simply a key component of "supply". >>
 
 Steve:
<<WRONG !  With gold, platinum, or  silver, the cost of production is
 what the intrinsic value of that commodity is.  >>

So assuming exactly the same production cost, the price of gold during
HIGH demand will be EXACTLY the same as when demand is low?
Don't think so.  Take a look at the price of gold over the last twenty years. 
 
Prices fluctuated wildly while extraction costs remained virtually unchanged.
The price of gold skyrocketed, and then came back to Earth.  Are you telling
me that, first, production was cheap-and-easy, then it was unbelievably 
difficult-and-expensive, and then it was cheap-and-easy again, and THAT'S why 
the price of gold
was low, then soared, and then fell?     C'mon.
It was changes in demand that sent the prices up, then stabilized them.
Production-cost is a sometimes-important factor of supply, but you don't have 
the complete economic waltz without the demand variable.

Steve:
<<You just proved my point by using "beanie baby".  They are not worth more
than the cloth they are made of,  you say.  >>

No, I said precisely the opposite.  I said that they are not worth more than 
the cloth TO ME, but that MY opinion, as a non-participant, doesn't count.
Beanie babies ARE worth more than the cloth to the only people who matter,
the people who BUY them.  THEY determine the price/worth. 

How could I have proved your point with beanie babies?  Your point was:
<<the cost of production is what the intrinsic value of that commodity is>>
There is the tiniest of production-cost for a beanie baby, certainly nothing 
to
justify a $500 price tag.  It is the demand that forces the prices where they 
are.
Now, those of us outside of the beanie-baby-world may think that the demand 
is foolish, that the prices are foolish, but the fact remains, the demand 
EXISTS
among enough people, and the prices reflect it.  The price of anything is 
determined by what
people actually buy and sell it for, not by what a non-buyer
thinks the prices OUGHT to be.

<<Gold has intrinsic value....meteorites do not.
Put a piece of gold next to a piece of Zagami and leave them on a sidewalk.
Which one do you think will stay there untouched>>

The Zagami will stay there untouched, until a meteorite collector/dealer 
walks by.
And THEY are the ones who determine the Zagami's worth, not the 1,000 people
who pick up the gold and keep walking.   

Gold has value because people demand it.  Another metal with PRECISELY the 
same production cost that gold has, could very well be 1/100th the price, 
because
there is not the same demand.

I think part of the reason we differ is rooted in semantics.  
To me, "worth" or "price" are objective
market terms.  The "worth" of a share of General Motors is a definite price 
at any
given moment.  Some people think it's too high, some think it's too low, 
that's why 
people constantly buy/sell, and that defines a "market".    You keep 
referring to
"intrinsic" value  -  less objective, and intrinsic value rarely parallels 
market value.  
Antiques are *worth* more than old wood.  Theater tickets are *worth* more 
than
cardboard.  Autographed baseballs are *worth* more than a baseball and a 
little
ink.  And meteorites are *worth* more than stone/scrap iron.   Intrinsic
value and market value usually don't have much to do with each other, or all
beanie babies and meteorites would cost 50 cents.  Which they don't.    

<< I do determine the price of meteorites-- That is I decide what I will or 
will
not buy>>

Well, fine, more power TO you.  I make the same decisions.  Everybody does. 
But where we all choose to set our own individual buying limits is hardly the 
same thing as the overall, prevailing rate for meteorites, the "big picture". 
  I might decide that, FOR ME, $35-a-share is too much to pay for Disney 
stock, but that doesn't make it true for the every stock market investor.     
 You can determine YOUR price, but you can't determine THE price.   Only the 
broad, overall market can do that.  

<<Meteorites ....will then be a rich man's hobby-->>

You say you've been collecting/dealing for 20 years.  (I confess, I'm only at 
about 15)
So at the beginning of your involvement, you could no doubt buy lots of stuff 
for way-
less-than-a-dollar-a-gram, right?   How about the guy who was around 30 years 
before YOU?  HE'S thinking, "Man, this stuff's only worth a dollar-a-POUND, 
and here comes this guy Steve who's paying way more than I EVER did".   
Should he have looked at you and said, "YOU are turning this into a rich 
man's hobby"?
After all, YOU paid waaaaaay more than HE thought meteorites were "worth".
Interested in your response.
Gregory
 
 
 


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