Due Diligence - How to Investigate a Stock Message Board

STOCKTALK

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 : Due Diligence - How to Investigate a Stock

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: David C. Burns who wrote (502)	5/30/1999 8:14:00 AM
From: Zeev Hed	Read Replies (1) of 752

David, I think that such calculations are useful when trying to "estimate" the fair current market value of companies that have no current revenues, but "hopes" for future revenues. Example, many of the internuts, companies with possible explosive revenues like RMBS, and BRCM where the bulk of revenues are expected more than two years hence, companies like VLNC and ULBI where such revenues might be three to four years down the pike, and companies like RNTK and REFR where the horizons might be even further. In all these cases you have both technology forecasting and market forecasting problems, and the more "cloudy" the future the higher should be the discount rate of future "forcasted revenues". As for the actual number, I would add to the base of 3 times the 30 years treasuries a rate of between 0% to 6% depending on "market risks" and another 0% to 6% depending on "technological" risks, and thus the maximum discount rate could be as high as 30% or five times the long term treasuries. These measures are, of course, very subjective. Zeev

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next