Before we talk further about value we need to highlight why something is valuable, and why there is risk involved with investing in any asset.
To do this we need to talk about Supply and Demand. You will have likely heard it mentioned in the news, and its a concept that is integral to economics, but few understand what it really means. Yet it is really quite simple.
Supply
The term Supply simply refers to the total available amount of a particular good (item/product/asset) or service.
Supply can be seasonal, for example, locally grown apples.
Demand
Demand for a particular good or service is simply a consumers desire and willingness to pay a price for that good or service. how many people want a particular item, as well as how much of that item they want.
Demand can also be seasonal. For example: demand for warm hoodies would rise during Autumn, likely peak in early Winter, then reduce into spring, and become minimal during Summer.
