DJ, you know better than anyone else that my life is
full of misunderstandings - usually followed by crucial losses.
But I've a brave heart, and so I risk to post here in this newly hard technical thread some fundamental thoughts - however, I know that's oldfashioned if I look at the markets as "shareholders" of "profitmaking companies". Who cares - I'm oldfashioned myself.
Here my 2c: (numbers from Zacks)
First round: AOL made 3,304.3 Mio sales with an income of 254.9 Mio. ("Praktiker", a local private-owned store-chain - I guess, well unknown in US - made 60 Mio....). Well. 17 Mio AOL-users assumed, each single user brought AOL 15 bucks - not bad.
Second round: Let's assume that AOL would be the worlds one and only access-provider (after having deleted ATT and all other Telecoms), still gaining $15 per customer, delivering his weakminded chat to EVERY household in the world - estimated 1,000 homes... Incredible, they would make 15 Billions income; $16 per share. Not bad, this EPS.
Third round: OK - every home worldwide, where's the outlook to expansions? In the meanwhile US will be fighting against every country worldwide, having no more money for NASA and the exploration of the universe. Hm. How shall I calculate... Let's assume that a P/E of 10 would be not bad for a company without expansion-fantasy.
Last round: OK - 10 times 16 are 160. So, IMO, yesterdays AOL-peak of 175 was overvalued.
Hope, you had fun, Professor!
Jury |
