Are Stock values not as overpriced as they seem?

Posted by  $  blarman 3 months, 2 weeks ago to Business
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So here's the debate: how does one quantify intangible assets? Should they really be on the balance sheet or not? Are they an expense or a capital asset? I think there can be a robust discussion both ways, to be honest, but it is in the actual valuation where the rubber meets the road.
SOURCE URL: https://www.bloomberg.com/news/articles/2018-06-06/what-s-a-stock-worth-in-new-economy-accounting-has-its-critics?cmpid=BBD060618_BIZ


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  • Posted by DrZarkov99 3 months, 2 weeks ago
    It's all a big casino. I bought stock in a prominent technology firm based on the fact they had demonstrated an innovative photonic switching system. I was confident they would gain big. What I hadn't counted on was the company apparently picking the dumbest program manager they could find to develop a production model and bringing it to market. The project stalled, they gave up and sold the patents to another firm, and their stock tanked. A broker later approached me to buy HP stock, and made the mistake of pointing out that the new CEO, who claimed she could bring the company back to life, was that same dumbass PM that destroyed the firm I had lost money on. If you can't learn enough about the human element involved, don't risk it.
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  • Posted by freedomforall 3 months, 2 weeks ago
    Bloomberg's message:
    "It's different this time."
    FFA's translation:
    Bloomberg has a vested interest in getting all of the suckers fully invested in overpriced shares so their pals on Wall Street can strip them of all the earnings left after government has looted them.
    Wall Street gets rich by stealing from others and lying scum like Bloomberg are their knowing accomplices.
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    • Posted by  $  3 months, 2 weeks ago
      That could be, but they did bring up some points worthy of discussion. In a world where much is becoming digital and service-oriented, it is becoming harder and harder to quantify assets in terms of real value. Should the methods of valuation change to reflect this new economic reality or is this just a hyped play to further justify overpriced stocks?

      In my opinion, the entire market is over-leveraged. To me, assets are only worth as much as someone else is willing to pay for them. The measure of a company's worth is measured quite simply: revenue - expenses = profit. If you aren't turning a profit, your assets really aren't worth all that much (see Facebook and other social media). To me, Wall Street divorced itself from Main Street decades ago be being run by computer algorithms. I also don't like what I see in the housing market as in my area, property values are again ballooning just like they did before the last crash. The third leg of the stool is bond values, which are worth nothing because of the artificially low interest rates.
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      • Posted by freedomforall 3 months, 2 weeks ago
        They have to include some arguably pertinent discussion as a smoke screen, just like liberals and the MSM do. They mix an arguable fact (bait) to mask the balderdash (hook) to tempt the fish to bite.
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  • Posted by CircuitGuy 3 months, 2 weeks ago
    This article was interesting. A few random comments:
    1. This only applies to price-to-book, which was never very reliable because the value of assets on the books has always been a rough estimate.
    2. Companies try to expense as much as they can so they get the tax deduction immediately, rather than as depreciation over the life of the asset. It doesn't affect long-term earnings, since they would show that expense eventually.
    3. At a time when unemployment is low and we've had a sold bull market since the last recession ten years, hearing someone say that because the nature of business has changed conventional valuation models no longer apply gives me a strong sensation of deja vu.
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  • Posted by MrSmiggles 3 months, 2 weeks ago
    Stock valuations are based on whim. If people are feelin it, it's high. If people are fearin it, it's low. So what you have to base your gamble on is how people are feelin. Stocks are more mood based than anything.
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    • Posted by freedomforall 3 months, 2 weeks ago
      Wall St manipulates the prices (by stepping prices artificially up/down) and the "whim" greed vs fear level (with pump/dump media releases) to steal from their "clients".
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      • Posted by Solver 3 months, 2 weeks ago
        If what is being done is voluntary and without fraud or government manipulation, and they’re always is that, this is a free market.
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        • Posted by freedomforall 3 months, 2 weeks ago
          Wall St ignores its "fiduciary" responsibility required in the agreements with customers and manipulates the law to give insider traders an unethical advantage. It isn't illegal because Wall St has run the Treasury Dept for decades. Material information is acted upon behind the scenes to steal from the customers but there is no independent oversight. No one watches the watchers. It is legal robbery.
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  • Posted by mia767ca 3 months, 2 weeks ago
    I am in and out of the market in options every 30 days...and can be gone in seconds...the whole thing is overpriced...a house of cards that can collapse at any time or crisis....I also trade both positive and negative sides...enjoy it while you can...
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