Those sincerely interested in using those tools have by now made an effort to learn their use.
While I heartily agree with the "qualitative first" approach, I wonder if it is really correct that valuation is a minority interest, as seems to be implied by your post. I can only speak for myself, of course, but it wouldn't surprise me that there were a lot more people interested in some kind of valuation now than were some months back, simply because the market has been rubbing our noses in it.
The problem, it seems to me, is that having an interest and knowing what to do aren't the same thing. The interest can vary from wanting a relative metric (this stock is a better deal right now than that one) to having some threshold criteria (gorillas should be bought/sold above/below some figure) to simply wanting some empirical way to avoid getting caught again. While a number of ideas have been presented, not only don't we seem to have come to anything resembling consensus, but it is clear that the "metrics" are quite subjective or at least subject to considerable interpretation (what is included and excluded from figures, what growth rates are used, what is the comparison threshold).
Not that we should all have the same criteria ... after all, we don't all agree on the classification of the companies under discussion ... but I, for one, find myself being unsure whether any simple metric is really going to add much to my toolkit if it is the case that I can prove just about anything, depending on what figures I use and the criteria with which I evaluate them.
Were this a problem in Anthropology ... which in a way I suppose it is ... I would be avoiding simple metrics as being deceiving and looking to develop a model which allowed me to evaluate sensitivity and stability. Unfortunately, not only is that hard, I'm not sure we know enough to build it, at least and have it be much more than an interesting exercise. I think this is particularly true on this forum since not only do we have the current examples of the distortion of the bubble and the impact of the broader economy to consider, but we are talking about gorillas which we know don't quite fit the rules of other companies.
Maybe the reason that valuation keeps coming up, but only in waves, is that, as a group (as opposed to those individuals who are happy with their own particular rules), we have yet to make enough progress to know how to use it on a consistent basis. So, something stimulates the discussion, it goes on for while, and then it fades. |
