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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: GVTucker who wrote (104708)	6/21/2000 4:00:00 PM
From: Road Walker	Read Replies (1) \| Respond to of 186894

GV, To take the most obvious example, there is no reason why publicly traded securities should be valued at anything other than 1x book value. Equities trade at differing multiples based on their past earnings growth rates and expectations of their future growth rates. If there is reason to believe that in the future the investment activity of Intel Capitol will out-perform the current book value of it's portfolio, isn't it logical that investors would value it above it's current book value? Intel capitol has been very successful, as demonstrated by their current quarter guidance of $2.3 billion in capitol gains. If you could buy into Intel Capitol right now as an investor, wouldn't you be willing to pay a premium to book, given their track record? John

To: GVTucker who wrote (104708)	6/21/2000 6:27:00 PM
From: kjhwang	Read Replies (1) \| Respond to of 186894

I am confused by your statements. I would have thought that your statement, "the multiple of book value" arises due to the concept of economic goodwill. Hence, if a business cannot generate a ROI greater than an appropriate discount rate, then the business should be valued at 1xbook value (aside from various accounting tricks to reduce book value for tax purposes). Otherwise, a multiple is appropriate to factor in economic goodwill. tci