Valuation theories

“… the problem was not that no one cared about intrinsic value. Rather, by the late nineties it seemed that few even believed in the concept.” From the book “Bull” by Maggie Mahar

A classical sign of a raging bull, when the old valuation theories are thrown out of the window and new justifications are being presented – and these are justifications of the current situation only.

Read the chapter “On Valuation” for further details …



plus ça change, plus c’est la même chose

Edward Chancellor writes in Devil Take the Hindmost: ” …the notion of intrinsic value was an oxymoron, since intrinsic suggested an inward quality, while value was always external. For instance, Nicholas Barbon argued that ‘things have no value in themselves, it is opinion and fashion which brings them into use and gives them a value’.”

Compare Nicholas Barbon’s view with what Harshad Mehta said centuries later. Harshad Mehta argued that the price of a share is a function of the market’s perception of the future and not the past.

“plus ça change, plus c’est la même chose”, meaning “the more things change, the more they stay the same”

#RidingTheRollerCoaster – 153