Chuzz, thank you for your kind tutelage through your posts on many sometimes esoteric subjects. Of particular interest to me is valuation of Dell, since I own stock. The CNPEG method makes sense to me in some respects, and I know from previous posts of the effort to include the risk element in it (I am not sure I have much appreciation of that effort).
Here are some thoughts that I have had over time.
1. I am not sure why the S&P 500 index is used, there are so many indexes, and others that could be constructed.
2. Why not compare with bonds, Treasuries, or other interest paying vehicles?
3. With the notorious internets, with their high stock price appreciation, the premium of Dell (I feel) in the market is lowered. I have the feeling that a lot of money has left the investment realm of stocks (where I include Dell), and moved into the gambling realm of stocks, and thereby lowered funds available to purchase Dell. I am struggling to present the idea of competition for money with this new group of stocks, as different from past stock markets where gambling was not so great. Because I am a novice at these highbrow thoughts, please accept my apologies.
Mike |
