Forum Archive Index - April 2000

["Gordon King" <gordon.k@clear.net.nz>]

NTA is a mighty fine valuation method in unproven industries when the focus is on protecting investors from specific risk.  Outside the quoteable companies sector, other methods such as cost, cost less provision or arms length third party offers seek to serve the same purpose;  prudent and conservative valuation that protect investors and, just as importantly, drives sound management decision making. 

 

PVGO is in effect the residual for quotable companies, what remains after the capitalised existing earnings per share is deducted from the shareprice.  Therefore it is the collective decision of the market as to what the growth prospects are worth in today's terms.  Consequently the PVGO component of a share price is highly fluid in new and dynamic industries.  It quickly changes according to new market information that affects the prospects of individual companies (i.e. unsecured supply agreements for BDO) or across industry groups (i.e. this mp3 sharing program doing the rounds.  New one on me but absolutely the deathknell for CDs surely).

 

Can I echo the sentiments of a previous postee; enthusiasm and ambition are good things, however blind optimism and credulous face value acceptance of promoter's claims is the quickest way to lose plenty of money.  No matter what the human potential pop psychology schools claim, you can't think something to success.  (I'm prepared to accept this is somewhat contestible). 

 

Gordon  

 

-----Original Message-----
From: owner-sharechat@sharechat.co.nz [mailto:owner-sharechat@sharechat.co.nz]On Behalf Of Patricia Troup
Sent: Sunday, 2 April 2000 08:04
To: sharechat@sharechat.co.nz
Subject: [sharechat] bdo

Thankyou Mr Paine for some balance on BDO.

I was seriously considering discontinuing reading sharechat, thinking it should be renamed BAGCHAT, because of the volume of ill-informed and negative criticism sprayed around by some of the subscribers.

When was NTA a valid benchmark of company valuations. I suggest Nil takes a trip to an Accounting or Financial analysis section of a library to get some knowledge in this department. Focus on the present value of growth opportunities, then you might have better investment returns.