Posts

Showing posts with the label value

Forgeries, Luxury Goods and Value

Blake Gopnik pointed out that when it comes to art forgeries, most people can “marvel at the forgers’ skill and lament their misdeeds”. Besides, he says: “If a fake is good enough to fool experts, then it’s good enough to give the rest of us pleasure, even insight.” And: “In some ways, they (forgeries) are by him (the famous artist), in the profound sense that they almost perfectly capture his unique contribution to art. If they didn’t, no one would imagine he’d made them.” And isn’t the only difference between a forgery and the standard practice of earlier times that one was authorized by the master and the other wasn’t? “Many wonderful works of art by figures such as Titian, Rembrandt and Rubens were executed partly or even mostly by their studio assistants, which doesn’t make them any less expressive of Titian or Rembrandt’s innovations.” Then Gopnik uses the art-should-be-for-all argument: “Our current market, geared toward the ultra-wealthy, is helping few and hur...

Insane Value of Companies

How much is a company worth? For a company listed on the stock exchange, that’s easy. Multiply the total number of shares with the price of a single share and you get the value of the company (as seen by the market). But sometimes, the numbers just don’t add up. Like Matthew Klein showed about Yahoo! in March this year . Yahoo! was valued at $39 billion by the stock market. It owned 24% of Alibaba that in turn was valued at $153 billion. 24% of $153 billion is $37 billion. Did that mean Yahoo!’s own businesses were only worth $2 billion? But wait, it gets even more insane. Yahoo also has a 35% stake in Yahoo Japan, which was then valued at $32 billion. 35% of $32 billion is $11 billion. That meant Yahoo!’s intrinsic worth was…negative!! And you thought Wall Street guys were smart! Stock markets like to value companies in the same industry (somewhat) similarly. Like all steel companies. Or all airline companies. Then the tech companies complicated that system. Like Apple (both...