Do you know how to value a company?
posted on
May 30, 2008 07:18AM
The mistake is that most people think a company has intrinsic value. It doesn't. Ultimately anything is only worth what somebody else will pay for it. As the last many alive after a nuclear war what the value of his gold is? The trick to creating wealth is to not find something undervalued, but to be able to see into the future. Nothing is undervalued today, because logically speaking, this is an impossibility. What you have to do is find a company that you think will be valued much higher in the near future. You have to use knowledge you have that others don't. You have to use wisdom. If you don't have these things, or know somebody who does have these things that you trust, then don't play the game, because your odds are no better than gambling and you don't get free drinks from the market like you do at the casino. Imagination is one of your greatest attributes as a human being. Stop looking at what Kimber is now, and start looking at what it could or will be. The more you focus on these things and the closer "could" gets to "will", the better prepared you will be to make in the words of Steve Martin, "Mucho Dinero." Bull