00:01
So i'm just going to start with the definition of liquidity.
00:04
And the liquidity in financial markets is defined as the ease of which you can convert an asset into cash.
00:10
That is just liquidity.
00:12
And the way i think of that definition is i think of liquid water.
00:15
What does water do? it flows.
00:17
So liquidity is talking about the ability of wealth to flow from state to state.
00:23
You can change or transform the shape of water by putting it in different containers.
00:27
Right.
00:28
If you put water into a glass, it will take the shape of the glass.
00:31
So liquidity is talking about changing the shape, changing the nature of your wealth.
00:35
So the definition of liquidity is just an ease of converting into cash, asset into cash.
00:41
It's obviously no money with no intrinsic value is garbage.
00:44
Anything is accepted in exchange for goods or debt is garbage.
00:48
It's just that's the definition you need to know.
00:50
So which of these is the most liquid? it's clearly not real estate...