Hi Erik, RE: (BV is) "based on the market value of the underlying securities in its portfolio, not the sum of the book values of the companies in its portfolio."
Woops, my bad. That sure looks right to me (re: book value definition on Intel Capital). However, re: valuation of Intel Capital, I would argue that the book value of Intel Capital (yes, the market securities of underlying portfolios, not the summation of their BVs), still does not capture the essence of reliability that Intel Capital achieves, nor the performance of the fund managers. And what is this reliability worth?
If I were to hire a fund manager, I would be a tad bit more interested in their performance. If I were interested in buying an investment firm, I would give the investment firm that yields predictable/consistent earnings stream a higher valuatation than another investment firm whose earnings may not have been predicable or were poor (even though both firms happened to be holding stock in the same company on the same day). i.e. the performance of the investor has value which goes beyond the underlying marketable securities. For example, there are a lot of investors that happened to hold INTC on the same day as Paul Engel - does that mean they are equally as valuable as investors? What about their peformance?
So, how is this value measured and where does it get factored into the equation?
If they give guidance on their earnings, why not use it?
Amy J |
