SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Gorilla and King Portfolio Candidates
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Stock Farmer who wrote (47916)10/15/2001 4:19:11 PM
From: Thomas Mercer-Hursh  Read Replies (2) of 54805
 
in this case, it is more like a soup-kitchen where someone wanders in hungry from the street and refuses serving after serving until such time as he sees a properly filled out health inspection sheet.

And I should keep going back to the same soup kitchen day after day without ever checking it out?


Message #47916 from John Shannon at Oct 15, 2001 3:57 PM

Thomas - my concern is that one requires a method to value gorillas. Having none just will not do.
Your analogy of someone walking into a store is not quite correct. For in that situation, one is exchanging value (money) for the goods and the various merchants might indeed wish to compete for the business.

However, in this case, it is more like a soup-kitchen where someone wanders in hungry from the street and refuses serving after serving until such time as he sees a properly filled out health inspection sheet. Feel free to go hungry.

This is not to say that one is perfect and the others are busted. Just that having none at all just won't do.

Not an area where we have a disagreement.

One should not expect a company to be worth more than what it will generate

I think that there are several different aspects to this question.

One is what is the basis of the metric one will use. By this statement you are pointing at a family of metrics. Which one should we pick and why?

Another is what do we do with this metric once we obtain it? Is it merely a rude screen that keeps us from doing something way out of line or does it provide some kind of buy and sell signals? How do we arrive at the values of those signals? What kind of confidence should we have in them? Are there other factors we should consider in combination with these signals?

And another is how well does this model relate to the real source of value for an investor, i.e., share price? Are there secular trends in share price in relation to this metric which might suggest different standards in the future? How decoupled is the market from this underlying reason and for how long?

For example, anyone recommending we buy QCOM at $50 is automatically implying that they think the economic value that will be generated by the company will be at least 35 B$ in constant dollars.

Actually, I would think that most people, not necessarily those in this forum, who are making such a prediction are implying that they think the share price will be higher in the future, not necessarily long term and not necessarily with any good basis. How well does share price tie into your preferred metric over time? How extended are the periods where the two are out of whack?
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News