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Biotech / Medical : Biotech Valuation
CRSP 63.99+4.7%Oct 31 9:30 AM EST
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To: Biomaven who wrote (26247)3/18/2008 4:52:27 PM
From: IRWIN JAMES FRANKEL   of 52153
 
>>But by all means go ahead and conduct an ex vitro wine experiment to celebrate the postponement of the end-of-the-world for yet another day. :)

I'll drink to that - Make mine Mogen David provided I can't get the same benefit out of a beer (root).

:-)

One comment on MTM:

One reader thought that I was arguing for maintaining historic cost on the books in contrast to MTM. My view (although I am sure I did not explain this) was that a company should be allowed to carry the security and value it with traditional reserving methods that look at indicia of risk, historic delinquency rates and things like aging of the delinquencies. This is the same way that the mortgages would be carried on the books if they had not been rolled into a "security". This offers one huge benefit - that panics will not force irrational values and the incident misstatements and possible failure of the firm. It does suffer in one respect - that if prevailing rates for the mortgages is significantly higher than the portfolio yield then the mortgage less the reserve will overstate the asset value. This factor could be handled with some adjustment for the present value of the mortgages by prevailing rates on similar mortgages. It would lead to a far better situation than we have under current FASB.

ij
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