Grant's estimate that intellectual assets are too highly valued relative to tangible assets has to be opposed lest people sell their valuable nontangible assets too cheaply on one of the usual dips in the market. Tangible assets don't multiply like intangible assets. A lump of gold doesn't even multiply at all. I well remember an esteemed analyst comparing GM and IBM. The latter had few patents, only a good sales organization and a good service(repair) organization and a strong interest in and knowledge about data processing. The time was 1956. The analyst laughed at the price of IBM and said that from the way too high valuation, idiots were expecting IBM to be worth more than GM. GM was chock full of tangible assets and deficient in intellectual assets. IBM proved to be a beautiful investment, going up about sixty times. GM has languished.
I say, people, please don't sell intellectual assets such as Softbank in order to buy tangible assets. Of course everybody has to choose their favorite intellectual assets.
I'll take the human brain any time. Never has the productivity of the human brain been so obvious, helped as it is now with thinking hardware. And software gets more and more valuable in comparison with hardware.
By the way, the Tenneco company with no particular growth prospects has to double in price or a little more, in order to be fairly valued. BUT that's it. There is no more. Suppose you need the money for Softbank,QCOM,NTAP,YHOO,SEBL
which imho will grow and grow and grow. You'd have to reluctantly decline the bargain in the shock absorber company. We can't put the same dollar in two places. |
