From: John Conover <john@email.johncon.com>
Subject: Company Valuation
Date: 3 Apr 2003 23:56:07 -0000
The investment banking industry made a lot of mistakes in company
valuations in the dot-com era. There are reliable ways to do
valuations. I added a methodology as a side bar at the end of:
http://www.johncon.com/john/correspondence/020218165107.2891.html#example-naic
which was an analysis of the North American IC market using data from
1979 to 1995, where I had a lot of personal experience.
John
BTW, if you are curious about how the sites:
http://www.johncon.com/ndustrix/
http://www.johncon.com/ntropix/
http://www.johncon.com/nformatix/
came about, they are all related. NformatiX is a document relevance
engine. In the mid 80's, it was hung on the major business press
distribution networks, (like BizWire,) and used to determine if a
corporate press release was positive about the future, or
negative-sometimes many hundreds of press releases a day went through
the system; the idea was to use press releases, (including 10Q filings
with the SEC,) as a predictor of corporate prosperity. After 8 years,
it was abandoned-press releases, (from companies, or their PR agency,
or their investment bankers, or SEC filings,) were no more reliable
about predicting the future than a tossed coin.
Thus the NdustriX stuff which was started in 1989, (for analysis of
the semiconductor industry, no less,) and used complexity-theoretic,
(i.e., fractal,) methodologies-which were inspired by early versions
of the tsinvest program from the early 80's-which gave much more
reliable results, and by 1994 was being used by many large technology
companies, (its realm is more closely associated with the field of
operations research than business and/or finance.)
But tying corporate prosperity to shareholder equity and
capitalization was a more formidable proposition, thus NtropiX, which
really came into its own in 1993, (although some early versions of the
tsinvest program were hanging on the US equity market tickers as long
ago as 1983, and were the inspiration to abandon NformatiX in favor of
doing things along the lines of NdustriX.)
The NformatiX, NtropiX, and NdustriX program suites still share a
common data and database format, (so it is still possible to link the
business press stuff, SEC filings, etc., from NformatiX to the market
metrics of NdustriX, and equity price pro forma of NtropiX.)
Just in case you were curious as to what the three N.*X sites are
about, and how they are related.
--
John Conover, john@email.johncon.com, http://www.johncon.com/