Saturday, June 22, 2019

Wisdom Of The Week

An analysis of book value doesn’t capture things like intellectual property and brand, intangible assets that corporations have accumulated or are currently accumulating.

And when the cost of money is lower (or, effectively zero) as it is today, these things become more highly valued by investors than physical assets are because they are weapons that corporations can use to nullify the moats and assets of the incumbent corporations that they are competing with for customers, revenue and market share.

This is why a AirBnB is currently more highly valued than all of the publicly traded hotel chains on the NYSE.

This is why Uber is worth more than all of the auto makers and taxi companies that own their own fleets of cars.

It’s why WeWork, which leases floors from building owners, is worth more than those building owners’ corporations.

This is how it’s possible that Beyond Meat, with its sizzling hot brand, could be worth exponentially more than the other publicly-traded food processing companies, with their century-old supply chains and manufacturing operations and union relationships and supermarket shelf space privileges and trucking contracts.


- When Everything That Counts Can’t Be Counted






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