Market value is influenced by the business cycle and can fluctuate over periods of time. Market values decrease during recessions (bear markets) and rise during economic expansions (bull markets).
Market value also depends on the sector in which the company operates, its profitability, debt load, and the broad market environment.
Market value for a firm may be very different from book value or shareholders' equity. A stock will be considered undervalued if its market value is well below book value. It does not mean that a stock is overvalued if it is trading at a premium to book value - it again depends on the sector and the extent of the premium compared to the stock's peers.
Generally, a crisis is caused if institutions or assets are overvalued, and can be worsened by panic and herd-like investor behaviour.
Contributing factors include systemic failures, unexpected or uncontrollable human behaviour, regulatory absence or failures, or contagions that is like a virus that spread from one institution or country to the next. If left unchecked, an economic crisis can cause a recession or depression.
The Stock Crash of 1929. On Oct. 24, 1929, share prices collapsed after a period of wild speculation and borrowing to buy shares. It led to the Great Depression, which was felt worldwide. One trigger of the crash was a drastic oversupply of commodity crops, which led to a steep decline in prices.
The 20007-2008 Global Financial Crisis. This was the worst economic disaster since the Stock Market Crash of 1929. It started with a subprime mortgage lending crisis in 2007. Then it moved into a global banking crisis with the failure of investment bank Lehman Brothers in September 2008.
Retailers may spend an entire year planning their Black Friday sales. They use this event as their chance to offer special prices on overstock inventory and discounts on seasonal items, such as typical holiday gifts.
Retailers also offer significant discounts on top-selling brands of TVs, smart devices, and other electronics, tempting customers in the hope that, once inside, they will purchase higher-margin goods.
Consumers often shop on Black Friday for the hottest trending items, which can lead to stampedes and violence in the absence of adequate security.
There is a theory stating that, when it comes to "Black Friday", the term "black" refers to being profitable, which comes from the old bookkeeping practice of recording profits in black ink and losses in red ink.
Retail businesses should be able to sell enough on this Friday (and the ensuing weekend) to put themselves "in the black” for the rest of the year.
Comparative advantage is also measured by the salary yardstick, and how much a person’s time, skills and core skill sets are worth.
Example: Michael Jordan is a skilled basketball player, and is very tall. If he wants, he could paint his own house by himself and do it quickly due to his height. But as he is also a skilled sportsperson, he could earn much more in that time, and probably hire someone else to paint his house, even if the hired painter (who has a comparative advantage due to his specialization of painting houses) takes more time to do it.