Market Capitalization Vs. Net Inflow of Money

When money flows into an asset, the price goes up. This can be quantified by the following formula.

C = (A+B)^2 / A^2

Where:

A = initial market cap

B = net inflow of money

C = price multiplication


So if the amount of investors money going into gold doubles, the market cap four folds.

For example:

A = 1 trillion

B = 1 trillion

C = 4 

Comments

Popular posts from this blog

Sibanye-Stillwater

The Consequences of Brexit

Gold/silver price Vs. Oil price