The concept of “going concern” in accounting emphasizes that a business must persist into the future to retain its value. This principle signifies that present value already incorporates expectations of future value; thus, a business facing uncertainty about its future will inevitably diminish in present value. It highlights the interconnectedness of present and future values, suggesting that they cannot be regarded in isolation. All stocks traded on the stock market are priced based on their anticipated future value. In essence, we trade on a future that has yet to materialize. Consequently, determining how far into the future to evaluate is a critical factor in making investment decisions. Since individuals have varying skills and perspectives on forecasting the future, selecting an investment strategy must align with one’s attitude toward time. - Joseph’s “just my thoughts”
In his book, “Thinking, Fast and Slow,” the Nobel Prize winner in economics, Daniel Kahneman, said that humans have two systems of thinking. These two thinking systems were called “system 1” and “system 2”. “System 1” is an intuitive and emotional thinking system that operates unconsciously and immediately. “System 2” is rational and is determined by careful consideration. “System 1” is advantageous for survival in a crisis and works immediately, so operating costs are less than “System 2”. When humans make decisions, they decide 95% with “System 1” and 5% with “System 2”. Humans decide by emotion, but by reason, they must revenge those foolish emotions. - Joseph’s “just my thoughts”