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To: Thomas Mercer-Hursh who wrote (47678)	10/8/2001 4:36:19 PM
From: Mike Buckley	Respond to of 54805

Thomas, Maybe the reason that valuation keeps coming up, but only in waves, is that, as a group ... , we have yet to make enough progress to know how to use it on a consistent basis. So, something stimulates the discussion, it goes on for while, and then it fades. I think you're absolutely right about that. I believe the ramification is that too many people are looking for something to work consistently in the short term when probably nothing does. This folder hasn't even been in existence for a long term, at least not by how I define a long term. --Mike Buckley

To: Thomas Mercer-Hursh who wrote (47678)	10/8/2001 4:48:46 PM
From: paul_philp	Read Replies (1) \| Respond to of 54805

Thomas, Maybe the reason that valuation keeps coming up, but only in waves, is that, as a group (as opposed to those individuals who are happy with their own particular rules), we have yet to make enough progress to know how to use it on a consistent basis. So, something stimulates the discussion, it goes on for while, and then it fades. I perceive a second issue: the difference between techniques of valuation and applications of valuation. We have had a number of good discussions on the mechanics or techniques of valuation. I have learned much in those threads. However, in today's environment even those techniques are of limited value. With the amount of uncertainty in earnings and growth, how do you value companies with superior competitive positions like Qualcomm and Siebel? Even if we do come to an understanding of valuation, what do we do with that knowledge? Is there a good buying point? Is there a meaningful 'don't buy' point? At what point should you take some profits if you assess a company's stock as overvalued? I understand the 'techniques' of valuation but I am much less certain of the applications. Paul

To: Thomas Mercer-Hursh who wrote (47678)	10/8/2001 5:30:45 PM
From: Pirah Naman	Read Replies (2) \| Respond to of 54805

Thomas: I wonder if it is really correct that valuation is a minority interest, as seems to be implied by your post. I believe I was consistent in using past tense about interest. Given the participation in both the thread and the polls, I think it has for the most part been a minority interest. And I was responding to discussions that were about our collective past interest. it wouldn't surprise me that there were a lot more people interested in some kind of valuation now You may be right. But if the interest is sincere, then where are there questions or comments? Given the helpful and friendly nature of thread members, one would hope that if somebody had developed such an interest and wanted to get more information from threadmates, they would at least ask for direction or source material. If they were shy they could ask any of numerous threadmates by PM. The problem, it seems to me, is that having an interest and knowing what to do aren't the same thing. This is true. But we all have to start somewhere, and that somewhere is usually by asking, or by trying something. Not knowing the answer already is not a reason to not pursue an answer. As for your points on sensitivity, we have to remember that we aren't going to get an accurate answer when gazing into the future. What we can hope to do, and can usually reasonably expect to do, is to identify obvious mispricings (over and under). Also, when one understands a model, one learns how to deal with its sensitivities. e.g., DCF analysis often looks unstable, yet there are ways of largely avoiding the sources of that instability. Getting back to what started this, I just don't think the thread or any individual should be criticized for what it or they choose to focus on. Hopefully we do well on those things we do focus on. If our results suffer, hopefully we will be pro-active and learn ways of improving our results. If we just bemoan our results, oh well. That's our option too. - Pirah