Quotes About Valuation

Of course, the discounting of future earnings should hurt all stocks. But it should hurt technology stocks more than others, because so many of them are valued at extremely high levels relative to their current earnings.

Early investors in Uber and Airbnb, though they remain private companies, have valued them at stratospheric multiples based largely on the notion that Uber will transform and dominate local transportation and Airbnb will revolutionize the hotel industry.

The usual reason companies are funded or valued on the stock market for not having a current profit is because the investors believe there will be a future profit.

A bubble in early-stage funding means maybe there's $300 million at work when maybe there should be $150, as opposed to a bubble in late-stage funding which means there's $20 billion at work when there should be $3.

A balance sheet is simply a list of your assets, your liabilities, and what each item is currently worth so you can arrive at your net worth. Your net worth is total assets minus total liabilities.

market capitalization (or market cap).

If you have a great strategy but overpay for a company, someone else's shareholders will see the benefits of your strategy, not yours.

There's beggary in the love that can be reckon'd.

people, even well-bred people like those, had a surprising tendency to take you at your own valuation.

The physical worth of anything is dependent on the value that you put into it.

The economic theorists' overvaluation of rigor is a symptom of their undervaluation of explanatory power.

Try to learn this truth Maximilien', Father Herivaux said: 'most people are lazy, and will take you at your own valuation. Make sure the valuation you put on yourself is high.

When the economy is good and everyone is making money, banks and other lenders can be surprisingly loose about demanding adequate valuation of the assets they're basing their loan amounts on. But when times get bad, it's just like Robert Frost once said: "A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.

In the short run, the market is a voting machine, but in the long run it is a weighing machine.

Managers and investors alike must understand that accounting numbers are the beginning, not the end, of business valuation.

There is no perfect mathematical formula for pricing a business.

How do you know how much to pay if you don't know what it's worth?

If the p/e of Coca-Cola is 15, you'd expect the company to be growing at about 15 percent a year, etc. But if the p/e ratio is less than the growth rate, you may have found yourself a bargain. A company, say, with a growth rate of 12 percent a year (also known as a "12-percent grower") and a p/e ratio of 6 is a very attractive prospect.

So while the smaller fast growers risk extinction, the larger fast growers risk a rapid devaluation when they begin to falter.

The p/e ratio can be thought of as the number of years it will take the company to earn back the amount of your initial investment—assuming, of course, that the company's earnings stay constant.

If you can follow only one bit of data, follow the earnings - assuming the company in question has earnings.

The most dangerous thing is to buy something at the peak of its popularity. At that point, all favourable facts and opinions are already factored into its price and no new buyers are left to emerge

An accurate opinion on valuation, loosely held, will be of limited help. An incorrect opinion on valuation, strongly held, is far worse. This one statement shows how hard it is to get it all right

No asset class or investment has the birthright of a high return. An asset is only attractive if it's priced right.