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Hidden Gems and Bubbles: How We Price What Matters

Value isn’t real. It’s a story we tell ourselves. A house, a violin, a stock—worth nothing until someone sees it, names it, believes it. Even intrinsic value, that sacred cow, is just a guess about what something could be. Prices rise on collective nods, subjective hunches aligning like starlings in flight. But when the crowd goes mad, chasing hype over truth, bubbles form. And bubbles burst. Here’s how it works, why it’s dangerous, and how you can use it.

Hidden Gems Wait for Eyes

Value shifts with the beholder. One man’s trash is another’s treasure.

A house sits, worn and sagging. A fixer-upper, cheap. But a geologist spots a diamond vein beneath. To him, it’s a fortune. Another sees the same glint, and the price soars.
A Stradivarius gathers dust in a pawn shop. A kid walks by, thinks of twangy tunes he hates. A violinist stops, heart racing. Priceless. A hidden gem, seen by the right eyes.
Stocks dance to a wild tune. Elon Musk said it best, riffing on Buffett: “Having a publicly traded company is like having someone stand outside your house and yell house prices all day.” (Read it here: link to post). Prices swing on mood, not math. Fundamental analysis—earnings, cash, hard assets—cuts through the noise, revealing a company’s true pulse. Day traders? They surf the zeitgeist, betting on crowd fever, not balance sheets.

Bubbles: When Fever Takes Hold

Sometimes the crowd’s roar drowns out reason. Prices climb, untethered. Call it group price psychosis. Bubbles form, and they’re deadly.

Bitcoin’s a strange beast. Its value ties to blockchain’s ironclad uniqueness, a promise of future trade. But no one agrees what it’s truly worth. Demand spikes, prices soar—$60,000 in 2021, madness. Speculation, not utility, drives the wave. When the fever breaks, the crash stings.
Fine art plays a subtler game. An unknown’s painting is a pretty rectangle for your den. Cheap. A print’s cheaper still. But an original by a name? Ten, twenty times the price. Collectors don’t just see paint—they see a town’s soul, a nation’s story. Auction houses hum with bids, but frenzy can tip into psychosis. A Basquiat sells for $110 million. Value, or bubble? Time tells.

The Crowd’s Mind: Recognition or Delusion?

Prices aren’t just numbers. They’re stories crowds tell. Collective recognition sets value—subjective sparks merging into a shared flame. Not a shoal of fish, blind and twitching. People weigh signals: news, tweets, whispers of scarcity. Bitcoin climbs when wallets multiply. Meme stocks rocket on Reddit’s cheer. But it’s not all instinct. Long-term investors dig into fundamentals—cash flow, assets—while traders chase the crowd’s pulse. When recognition hardens into psychosis, fueled by FOMO or scams like pump-and-dumps, prices balloon. Bubbles grow. And they pop.

The Power and Peril of Belief

Appreciation makes value breathe. A gem stays hidden till someone sees its potential, its uniqueness, its weight. The more who see it, the higher the price climbs. A Stradivarius isn’t just wood—it’s history. Bitcoin isn’t code—it’s a bet on tomorrow. Art isn’t paint—it’s a people’s truth. But crowds can lose their way. Group psychosis turns belief into mania, inflating bubbles that burst and burn. Fundamentals anchor us—earnings, utility, scarcity—but the crowd’s voice is loud. Too loud.

How to Use These Ideas

So what do you do with this? Here’s how to navigate value’s wild ride:

Spot Hidden Gems: Train your eye. Research markets others ignore. That rundown house? Check its bones—location, resources, trends. That stock nobody loves? Dig into its financials. Earnings strong, debt low? You’ve found a gem. Knowledge is your edge.
Dodge Bubbles: Watch the crowd. Hype on X about NFTs or crypto soaring? Pause. Ask: Is this utility or mania? Compare price to fundamentals—Bitcoin’s tech, an artist’s legacy. If the story’s all sizzle, no steak, step back. Save your cash.
Pitch with Precision: Selling art or ideas? Frame the uniqueness. Tell a story that ties your work to deeper meaning—a community’s values, a future trend. Collectors and investors buy potential, not just product. Make them see it.
Stay Grounded: Use objective tools. For stocks, lean on cash flow, revenue growth. For art, check auction records, artist demand. For crypto, study adoption rates. Numbers cut through the crowd’s noise. They keep you sane.

What gem have you found? What bubble have you watched collapse? Tell me below.

#Valuation #HiddenGems #Bubbles #PricePsychosis #Bitcoin #FineArt #StockMarket

“The Bride”. A an example of an experimental, or concept album project from 2022. Painted in acrylic. (Private collection)

Building Confidence Through Language: A Guide for the Collector

One of the biggest barriers for aspiring art collectors is not a lack of taste, but a lack of confident language. People know what they are drawn to, but they often struggle to articulate the ‘why’ behind their emotional connection. Providing them with a basic vocabulary can be transformative.

By explaining core artistic concepts, we can bridge this gap. An artist’s newsletter or a gallery brochure could break down:

The Architecture of Composition: How lines and shapes lead the eye and create a focal point.
The Emotional Weight of a Color Palette: Why a limited, muted palette feels different from a vibrant, high-contrast one.
The Role of Value in Creating Depth: How the interplay of light and shadow builds a believable world.

It’s like being given a phrasebook in a foreign country; suddenly, you can navigate and connect with more assurance. Consider Edward Hopper, whose stylized realism simplifies scenes to their emotional core. Understanding this allows a collector to explain why the work feels so dreamlike and memorable. This knowledge doesn’t replace the emotional response; it validates it.

The Dialogue Between Feeling and Form

Great art speaks to us on two levels: the immediate, gut-level emotional reaction and the deeper intellectual appreciation. You might feel the perpetual warmth and light in a Monet, which immerses the viewer in the sensory experience of a moment. Conversely, you might sense the rugged, stoic soul of the landscape in a piece by Canada’s Group of Seven, which evokes a feeling of profound solitude.

These feelings are universal, but the ability to discuss why we feel them builds a stronger connection. From a marketing perspective, this education slots perfectly into the buyer’s journey. During the “comparison” phase, an artist who also educates their audience is building a relationship of trust and authority, making the final “decision” more likely.

Conclusion: A Bridge of Shared Understanding

Art, in its purest form, is an act of communication. Whether through the calculated narrative of a storyteller or the freeform expression of a poet, the artist extends an invitation to the viewer. By providing the language to understand this invitation, we empower collectors to move beyond simple preference and into the realm of true appreciation. It transforms a simple transaction into a meaningful connection, where the viewer doesn’t just own a piece of art—they become part of its ongoing story.

About the Author

Jaeson Tanner is a Marketing Thinker at Zero Noise Marketing and a narrative artist once in a blue moon. You can see his work on Instagram at @jaeson_tanner.