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To: Paul Merriwether who wrote (72642)	10/16/1998 4:30:00 PM
From: Chuzzlewit	Read Replies (3) \| Respond to of 176387

Paul you said That's an interesting way to do valuation of a common stock! Nope! That's exactly how it's done. A company is worth exactly what a willing buyer and a willing seller agree it's worth. Just like a house or a used car. The problems with calculating "intrinsic value" are monumental. When people talk in terms of expected earnings and discount rates what they are really doing is benchmarking the stock against either historic sales (a big mistake IMO), or sales of comparables (just like in the RE game). A 4,000 sq ft house with a view in an upscale neighborhood may be a growth stock and sell for $200 /sq ft. A 1,200 sq ft. rambler in a working class neighborhood may be a utility and sell for $70/sq ft. Now try putting investing in art in some kind of rational framework. And if you get tired of that one try valuing gold. TTFN, CTC