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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Rainmaker888 who wrote (39459)	9/28/2010 2:10:26 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78744

Also, if one was to purchase this business, why can't they combine the asset value and earnings power of the business? It does not make sense to do that because either you sell off the assets - liquidate - and then you have no business left. Or you run a business and then the assets are producing and you cannot just dispose of them to give them to shareholders (or yourself as an owner). Yes, you could return part of cash to shareholders, but usually you can return maybe less than 50% of the total cash, since part of it is needed for your business. And obviously you can't just get rid of payables and receivables that would be liquidated in liquidation. I guess you could argue that EV = market cap + debt - cash and you are just substituting market cap with your "expected market cap = 10P/E * some earnings" in this formula to get RainmakerEV :) This is different from what you did though, since you did SomethingNotClearWhat = expected market cap + cash - debt... Not sure even if you calculated RainmakerEV what this would tell you. Maybe you could argue that someone could be interested to acquire a company for RainmakerEV. Not applicable to Echostar that cannot be sold unless its controlling shareholder says so. Which brings us back to it being a faith investment. ;)