Fundamental is the atman, Liquidity the prana, Sentiments the maya
One of the oldest scriptures and philosophy in the world is the Vedic philosophy. These scriptures are a comprehensive effort to describe all aspects of the universe and human existence. To undertake this gigantic task, they rely on three core ideas – Atman, Prana and Maya. These ideas are the inspiration for our perspective on investment research and money management.
‘Atman’ is the ‘true’ or ‘absolute’ self of a person, beyond all names and subjective judgements that the world and the person choose to apply on themself. In that sense, real assets and profit-generating capacity of all economic entities and participants are the ‘fundamentals’ underlying every kind of market. Without the Atman, an individual cannot exist. Similarly, without fundamentals, value cannot persist.
‘Prana’ refers to universal energy in all it’s forms. It is the vibrational force that makes every electron and atom vibrate and move. For markets, the dynamic flow of money which we study as liquidity, enables participants to undertake economic activity and create an ecosystem. While Prana enables life, liquidity imparts a ‘value’ to assets and organisations.
‘Maya’ depicts the illusion of this world as subjectively experienced by all humans. Each person imagines the world in a peculiar way, based on their own opinions and perceptions, and live accordingly. ‘Price’ is the illusion market participants assign to every economic unit, according to their subjective ideas of the present and the future, based on myriad assumptions, experiences and predictions. Maya is the intricate illusion of this universe created in our minds and price is the ever-changing perception of economic value created by investors.