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Strategies & Market Trends : Value Investing

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To: Difco who wrote (44711)	10/1/2011 12:19:14 AM
From: Jurgis Bekepuris	Read Replies (3) of 78667

NFLX - I think you are asking me a wrong question "what do you think would be a good metric for valuation?" If you have to invent special metrics to value a company, then it's most likely you're just fooling yourself that it's cheap. Comparable takeover prices proposed by Mark Marcellus in his response is IMHO one of such metrics. Lots of people lost tons of money expecting comparable takeover pricing - including some IDCC investors very recently (I still hold some IDCC that I coulda/shoulda sold at "comparable takeover" pricing runup though I sold most of it.) If I am misinterpreting your question and you are asking "what is good price to buy NFLX", then my answer is maybe at $3B valuation, but even then I'd not be sure. As I said, part of this is unanswerable, because for NFLX to trade at $3B valuation some really bad things have to happen and these things would have to be evaluated before buying. Disclosure: I think NFLX CEO is stupid to split NFLX into two companies. My arguments were outlined here: Message 27649675 . In our household, I would cancel both NFLX subscriptions right now, but it's outside my hands ;) so I'll see what cooler head (of the household ;)) decides. :)

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