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To: cfoe who wrote (123250)	8/16/2002 1:06:33 AM
From: The Reaper	Respond to of 152472

preparing for war? kirby

To: cfoe who wrote (123250)	8/17/2002 12:17:55 AM
From: Wyätt Gwyön	Respond to of 152472

some have asked which Smithers papers i was talking about. the easier one (which i would suggest starting with) is "The economic consequences of Alan Greenspan" at econ.bbk.ac.uk (Don't be fooled by the title; it's more about market valuation and refuting EMH than about greenspan). the second one is "Equity Valuation Issues" at smithers.co.uk this one contains some rehash of the first paper, but also goes off on some very interesting tangents that may repel those allergic to math. anybody interested in Smithers' ideas ought to read his book "Valuing Wall Street" for a fuller explication. the thing to remember about Tobin's q is that it is basically tangible book at market value, not carrying value. Smithers makes a number of very useful insights. e.g., he states that a dividend discount model, while applicable in principle to an individual company, is not applicable to the market as a whole. the main reason for this is that an individual co is too small to impact the aggregate cost of and return on capital, whereas the market of course has such an impact. as a result, an identity obtains between cost of capital and return on capital for the market as a whole. Smithers says this is the single most misunderstood point in finance. that is just one of a number of interesting observations.