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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: tyc:> who wrote (3928)	5/30/2001 10:08:07 PM
From: John Pitera	Read Replies (2) \| Respond to of 33421

Tyke, There are several variables that could be considered and would affect the fair value number, I would think. there are enough uncertainties in my mind as to what the answer would be, so I'm not sure I can help. one would want to take a look at the risk free rate of return, (the TBILL rate) and then discount the opportunity cost of not getting any income on the money for 4 years. It would seem imperative to also make assumptions regarding what gold will be selling for 4 years out, as well as consider the sunk costs and marginal costs of production. Is this "Product" going to produce 100 oz. or 100,000, and the cost of product should move along a curve depending upon output. what are the circumstances that have you posing this question? .....one bit of advice (If someone is trying to sell you a Goose that is supposed to start laying 1 oz golden eggs in 4 years... I'd look askance at that investment opportunity -g- John