Silicon Investor (SI) -- The First Internet Community

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 : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Art Bechhoefer who wrote (45965)	8/29/2001 2:57:07 PM
From: Stock Farmer	Read Replies (3) \| Respond to of 54805

Hi Art, I figure no need to worry about whether IP is developed in house or acquired or spontaneously appears or is destroyed... The value is accounted for. By my simple way of thinking there are two parts to a company's value. First is the physical asset base that they have - whether goodwill or cold hard cash and everything in between. The next part is the prospective future flow of cold hard cash that the business will convert into assets of varying flavor. This second part is where IP comes in (because that's what the company uses to do business). It really doesn't matter how it was made or acquired in the first place. Regardless of where the IP came from, it's "value" is already accounted for in the one-plus-x-to-the-nth-power determination of future earnings. It's the justification for "x". The old tree falling in forest argument applies here too, but I hold by the premise that if IP isn't somehow monetized then it isn't worth anything. By way of extreme example, you could hold the patent to photosynthesis and not be able to squeeze a dime out of all those infringing plants... that IP - while potentially valuable - is worthless. So this is why think that if someone tries to "value" IP and include it as assets before future cash flow... well, they run the risk of double counting unhatched chickens. John