Hi ya Chuzz, good to see you over here, we need it. Ok first off, as you mentioned "Black Box" approach. The following question is the big problem we all are facing. How does one value IP? Very hard to do, in fact the only way one can really do it is to take a vote. It's like land. What is it worth? It's worth what the next guy will pay, or what the market will bare. I know it sounds simple, but this is the market we are in. Next, also related to your Black Box. Your use of the following, "I generate a risk adjusted discount rate to apply to those cash flows. I use the following: risk-free rate = 6.5%. I add risk premiums of anywhere from 3.5% (for ultra low risk stocks like utilities) to 30% (for ultra risky companies). For QCOM I use a risk-adjustment of 20% for three principal reasons: QCOM will face competitors who will try to circumvent its patent on CDMA, CDMA has yet to be recognized as a standard in Europe and China; QCOM's future depends entirely on the success of CDMA, which means that a technology developed in the future could obsolete CDMA. Who is using these risk adjustment numbers? What standard body decided on them? I'm sure it's all yours. Until the masses adopt your thinking, it's merely an academic exercise to quantify something, that can't be, unless the masses believe in it. That is why we have markets.
Greg
p.s. I hope all is well with your wife. |
