---
type: claim
domain: internet-finance
description: "Standard financial analysis treats underlying relevance as fixed and only market price as variable, but paradigm shifts change what HAS value, not just how it is priced — creating two layers of instability that static investment frameworks cannot model"
confidence: likely
source: "m3ta, Architectural Investing manuscript; Cesar Hidalgo, Why Information Grows (2015)"
created: 2026-04-04
---

# Value is doubly unstable because both market prices and underlying relevance shift with the knowledge landscape

Standard financial analysis treats the underlying relevance of a commodity or technology as fixed and only its market price as variable. Discounted cash flow models, price-to-earnings ratios, and technical analysis all assume that the thing being valued has stable importance — the question is only what price the market assigns it.

But the knowledge landscape changes which resources ARE relevant, not just how they're priced. Copper was economically marginal for millennia, then Faraday's discovery of electromagnetism made it essential infrastructure overnight. Oil was a nuisance seeping from the ground until the internal combustion engine made it the most strategically important commodity on earth. In both cases, the resource didn't change — the knowledge landscape changed what mattered.

This creates two layers of instability: (1) the familiar market-price volatility that financial models capture, and (2) a deeper instability in what has value at all that no standard model addresses. Investment strategies that only model the first layer miss the more important one.

The implication: paradigm shifts don't just change prices — they change what MATTERS, rendering entire analytical frameworks obsolete along with the assets they valued. Architectural investing specifically targets this second layer — identifying which knowledge landscape shifts are underway and positioning in the resources and technologies whose relevance is about to change.

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Relevant Notes:
- [[priority inheritance means nascent technologies inherit economic value from the future systems they will enable]] — priority inheritance works because of double instability
- [[products are crystallized imagination that augment human capacity]] — if products embody knowledge, shifts in the knowledge landscape change which products matter
- [[power laws in financial returns indicate self-organized criticality not statistical anomalies]] — self-organized criticality produces the first layer of instability; knowledge landscape shifts produce the second
- [[the clockwork universe paradigm built effective industrial systems by assuming stability and reducibility]] — static investment frameworks are a financial expression of the clockwork worldview

Topics:
- internet-finance
- teleological-economics
