vania-janet/multiturn-rag-retrieval-data huggingface dataset:
With the S&amp;P 500's cyclically adjusted price to earnings ratio above 26 and inching closer to 30 everyday I would be inclined to disagree. Also price trends and technical indicators say nothing about over and undervaluation. If fact technical indicators are worthless in the real world.
&gt; Ideas have no inherit value, so they can't be cheap or expensive  I really don't know where you get this idea. This comment shows some ignorance of how business works, and doesn't give me much confidence in the value of your upcoming suggestions.
"That would be great ... if there were an objective and impartial standard for ""worth to society"". But there isn't, and so the price system (if uncorrupted by coercion) works beautifully. You don't have to decide if he's ""contributing to society"", you just decide if you want to buy his good at his price. If you think he's charging too much, then don't!  Of course crony capitalism, subsidies, and lobbyist-directed government coercion kind of mess up the entire price system."
I see this same argument with Amazon who's P/E is also through the roof. Valuation is way more complicated than looking at income statement ratios. There are some pretty solid reasons for its valuation. I'm inclined to agree it is overvalued, but not as much as you think.
I get the feeling the value of reddit is not presented as something that makes profit, but rather an entity that can shape public opinion. In that way it is extremely valuable. The fact that mods are clearly paid by someone yet not officially employed by Reddit is a huge red flag that money is flowing, just not in the traditional ways.
Okay, first of all Fair value may not be target price. Lots of things can go into a price that won't be in fair value such as expected future price.  Second of all, if you were good at equity research and could make money off of doing it, you would start a hedge fund or get paid very well by some company. If you aren't good at equity research but still want to do it you do journalism and estimates on 'fair value'
I could argue Amazon. And Facebook the other way.  Before the down-vote brigade appears, I'll just say I said I could *argue* those points. Also, I haven't done valuation in years, and definitely not for tech because while I am a big techie, the industry itself seems likes a clown lottery with respect to valuation.
define 'should be'? according to what? according to who?  Apple and Microsoft both have the strategy of enough money in the bank to fund their operations for a long time with no revenue or profit. As a safety net for the future of the company. I presume Facebook and Google are thinking something similar.
It's been traded publicly for only about a month.  I wouldn't put much credence in a P/E ratio just yet because it hasn't had to report anything like a grown-up publicly traded company yet.
He might well be right. But just to check - is your professor an actual entrepreneur as well as being a prof? I wince at job titles like that if the person hasn't actually created a business or at least worked in industry.
See, the tricky thing about a question like this is that nobody in r/economy is actually an economist.  They read the latest shit on zerohedge or ron paul's weekly newsletter and think that means they have an informed opinion.  When in actuality their opinions are worth exactly as much as the part-time McDonald's paycheck their scribbled on the back of (nothing)
I'll play devils advocate even though i agree that they are overvalued.  EPS is expected to go from .43 in 2016 to $1.20 2017 followed by $1.90 in 2018, this means they are expected to grow at 110% a year over the next two years, an many experts think they will continue to grow at 30-40% a year after that. Now many people don't think a stock is expensive until it hits a PE of 2x its growth rate, if we use a growth rate of 110% then they won pay more than 220x earnings. assuming they are using this years earnings estimates since the year is already more than half over that puts a valuation of $264 per share. If they use a 4 year estimates that EPS will grow at 72% a year the valuation is $172.8.  Before people berate me i don't value stocks in this manner i use DCF, but alot of people who are looking for an easy way out will look at it this way.
Seriously.  I generally agree with the sentiment he's trying to convey though.  That there is something to be said for a business that provides a tangible product.  However, this IPO proves nothing about anything except that this one particular business, at the moment, is doing the right things.
&gt; e S&amp;P 500's cyclically adjusted price to earnings ratio above 26 and inching closer to 30 everyday I would be inclined to disagree. Also price trends and technical indicators say nothing about over and undervaluation. If fact technical indicators are worthless in the real world.  you mean the Shiller PE?  LOL.
Blue Apron has become pretty synonymous with dinner delivery services. The name recognition alone is probably worth their current evaluation. I think you're right it wouldn't be hard to compete, and they do have a lot of competition. But I think you'd be hard pressed to find anyone who can name something other than Blue Apron.
Not sad but evil. Who am I to assign a dollar value to your life, your hopes, your dreams, your happiness? Who is anyone else?  Maximizing utility or the public good sounds nice, but it’s empty sloganeering similar to “maximizing fairness.” No one measures or even describes how&amp;mdash;for good reason: it can’t be done. Our respective preferences are unique. Feel-good words are just that.
"Ehhhh, I'm not sure.   My stance is this: they're not really designing games as much as they are making digital products that plug into the brain in insidious ways. The number of people with psychology backgrounds who can work at an IT-focused company has got to be pretty small, so whatever industry they're in, ""social games"" or whatever, is seriously talent constrained. I don't think there are any serious competitors to Zynga, just a bunch of people trying to crack a similar formula.  While only 3% of their users generate virtually all of their revenues, as facebook's installed base climbs upwards of a billion users, 3% of whatever fraction of those users who use zynga products will continue to be non-trivial.  As facebook's currency becomes used for more and more stuff, and I fully expect this will happen, users who wouldn't kick money into facebook just for farmville will have balances remaining in their facebook wallets, and be more inclined to buy that fertilizer or virtual goat milker or whatever, meaning a new revenue stream from another type of user.  Beyond that I'd think that their best customers might actually be brick and mortar retailers, companies that are buying Zynga gold to bundle with their physical products as a value add.  Now, does all of that make them worth $7bn? I'm not sure, but it does make them a significant player. Mark Pincus is a brilliant, evil man. I wouldn't dismiss his company too easily."
All they care about right now is market share. The profit will come later (see Facebook for example).   Or better yet, read about the marshmallow experiment (wiki:  https://en.wikipedia.org/wiki/Stanford_marshmallow_experiment).  The same rationale is why Uber, Lyft, Tesla and all of these other tech companies are valued so high.   That being said, I do not know that Snap, Inc. will be a success. I'm just saying that it's naive to say that Evan is a fool. For all we know, he's creating the next AR (insert buzzword) technology. We don't know.
Maybe one of my issues is that I have a 5 year model with a terminal value. The repayment of debt principal is outside this time frame so I don't assume any repayment.   If you're valuing a company share price though you don't model all debt repayments.
Wow, I don't believe it for a second, the admins are allergic to making money.  This is right up there with Instagram being a billion dollar company...some people are smoking some good shit.  These parts are relevant, the rest is wild speculation, Advance Publications might be trying to drum up some buyers for a sell. &gt; By FORBES’ estimate Reddit is a paragon of thrift, spending just $7 million a year to support a 22-person payroll and 75 servers rented from Amazon’s cloud.  &gt; Value Reddit strictly on the basis of its skimpy current revenue and its inability so far to turn a profit, and the site probably falls short of even $50 million. Digg ended up being sold in pieces for a reported total of $16 million.  Cost $7 mil a year to run, doesn't turn a profit, in an industry where new competition pops up daily...sounds like a winner to me.
This is from Google Finance right now.
That was an elegant and well thought-out analysis there.  I'm surprised someone hasn't tapped you to be an economic analyst what with your masterful command of the written word and discourse.      That or you just learned that word and wanted to use it.  *pats climber514d on the head*.
Or, that he'll decide its time to take his money and go sit on an island.  What he fails to point out is that, unless he is a petulant idiot, he will mostly likely then sell out to investors without his idiosyncraticies and the business and employees will remain as they were.
&gt;Is she really more than a pretty face which helps the company grow revenues and attract a high valuation?  You say that like its a small feat.  The amount of attention she is has generated for the Company and its products makes her involvement incredibly valuable.    I don't imagine she is there packing boxes or negotiating with suppliers, but I don't think that makes her contributions less valuable than those of the other primary investors.
Alright business types, how is facebook worth anywhere near 24B? Where is this revenue coming from?   Also, how are they so sure facebook isn't going to be the next myspace, given how fickle the population is and how many people are already fed up with facebook to the point where they have closed accounts?
"&gt; What's their performance been like in recent years?  IIRC the last time they were able to pay a dividend was in 2000, so I'm gonna go with ""not great"".   Thanks a lot for the effort, I didn't factor in tax at all, it makes more sense then. I still think it's an interesting concept that shares are worth less than what you ""get"" for them (according to their accountants, who knows what the value actually would be if you tried to sell whatever they own now), and I found basically nothing on google. The whole is usually more than the sum of its parts, not (significantly) less."
The options market seems to disagree...  While the implied volatility is greater than the historical volatility.. At 23% the implied isn't much higher than the past implied-vol. I'll trust the market over the stock-twits chairman.  http://www.cboe.com/framed/IVolframed.aspx?content=http%3a%2f%2fcboe.ivolatility.com%2foptions.j%3fcontract%3dC0F1D96A-D9C7-49D2-8941-45DC1B0E0B0F&amp;sectionName=SEC_TRADING_TOOLS&amp;title=CBOE%20-%20IVolatility%20Services  ... that being said -- I (like everyone and their sister) think we break 100 and move hard to 104-105.
This ship is headed for an iceberg. Has to be valued at less than half of its high of $80 billion. Getting killed on losses. Sexual harassment. Huge c-level turnover. Big lawsuit with Google. And terrible PR.
I took a look at their cash flow and they spent 3 billion buying back shares and another 3 billion just last year in capex.  That is 6 billion right there.  I'm not sure what that capex was supposed to buy but it appears they aren't getting much of a payoff.
I understand why you say that but I assume that there is another financial shake out in the next 5 years.  As they are not profitable and do not have a plan to get to profitability.  I think they will die. You can not bleed money forever.  They can not IPO (escape??) do to the stolen IP problems.  The moment they expose their finances and management problems to external their valuation will be closer to $10 Billion not $60 Billion.  A real valuation might be $1 Billion.  They will disappear as fast as they arrived.  Uber will be as famous as Pets.com or Webvan.
"&gt;That would be great ... if there were an objective and impartial standard for ""worth to society"". But there isn't, and so the price system (if uncorrupted by coercion) works beautifully. You don't have to decide if he's ""contributing to society"", you just decide if you want to buy his good at his price.   But now you haven't answered the question, you've changed the question."
I'm not really sure about this site but readers should take time to look around a bit. It does seem like they are trying to telegraph some views here rather than being an unbiased economic journal.  Take it at face value if you want, just be aware of the motives of the messenger.
Our view is that just be cause AMZN can disrupt somebody else's profit stream, it doesn't mean that AMZN earns that profit stream. For the moment, the market doesn't agree. Perhaps, simply being disruptive is enough.  While he is right in theory, the problem with this viewpoint is it is incredibly short sighted. Amazon is disrupting spaces to the point of near outright ELIMINATING entire markets. When Amazon eliminates a market, that revenue has to go SOMEWHERE... and while Amazon may not turn a profit on it now, since they now own that entire market it would be extremely simple to in the future.  I can make simmilar comments for most of these companies. The reason disruption is being valued so high is because the disruption happening today is so massive compared to history. The disruption these four companies are causing is on the order of magnitude of what Ford caused with the assembly line... Except greater.
I'm a finance newb....sorry ahead of time for everyone slamming their heads against the the wall.  I'm going to go ahead and possibly answer my own question. Do I just go back 4 months at a time from their 10K and record the stock price on that date?
See this link...I was also looking an answer to the same questions. This site explains with an example  http://www.independent-stock-investing.com/PE-Ratio.html
Cost of capital is also a very misunderstood concept since schools often just give students the 'cost of capital' for math problems when in reality, it's not just an explicit number but more of a 'general feeling' in the environment. Calculating cost of capital is actually often very tricky (market risk premium) and subjective, sometimes it's not (LIBOR based). After that, you can build up on those basic concepts and start to do things like dividend discount models (basic theory underlying asset pricing models) and capital asset pricing models, which builds on the idea of cost of capital. Then go into valuation. Learn how to price equities, bonds, derivatives, etc. For example, you have the dividend discount model with typical equities and perpetuities. Fixed income has things like duration &amp; convexity to measure risk and analyze yield curves. Derivatives, you have the Black-Scholes model and other 'derivatives' (heh) of that formula for calculating prices of options, futures, CDOs, etc. Valuation is essentially taking the idea of TVM to the next logical step. Then you can start delving into financial modelling. Free cash flows, discounted cash flows, ratio analysis, pro forma projections. Start small, use a structured problem that gives you some inputs and just do calculations. Bonuses* would be ideas of capital structure (really not necessary for entry level positions) like the M&amp;M theorems on capital structure (debt vs equity), portfolio management (risk management, asset allocation, hedging, investment strategies like straddles, inverse floaters, etc), and knowledge of financial institutions and banking regulations (Basel accords, depository regulations, the Fed, etc.). Once you gain an understanding of how this works, pick something out there and do a report on it. Then you'll be left with a single 'word problem' that gives you nothing except a problem and tells you to find an answer. You'll have to find all the inputs and give reasons why these inputs are sound and reasonable inputs for this analysis. A big part that people don't understand about projections and analysis is that **inputs don't exist in plain sight**.
See this spread sheet I worked up for fun.   https://docs.google.com/spreadsheets/d/1ZhI-Rls4FpwpdpEYgdn20lWmcqkIEhB-2AH0fQ7G2wY/edit?usp=sharing  If you are really crazy you can do what I did and model the rates (modified normal) and expenses (large items like the roofing being replaced on exponential) distribution and run a monte carlo simulation to get maximum likely losses by years and ranges of final values.  P.S. As a side note, this spreadsheet makes a lot of assumptions and I would consider it absolutely necessary to be able to build a sheet like this and understand all the assumptions and play with it to see how quickly this can turn into a losing investment before making any business investments.
I'm going to have to take you to task for this post. If someone is incapable of determining the implied current P/E in the IPO price then they should not be buying stocks. You cannot blame Wall Street for the greed and stupidity of the public.
You could use  the Gordon growth model implied expected return: P = D/(r-g) --&gt; r = D/P (forward dividend yield) + g (expected dividend growth). But obviously there is no such thing as a good market return proxy.
Stock price = Earning per share * P/E Ratio. Most of the time you will see in a listing the Stock price and the P/E ration. The calculation of the EPS is left as an exercise for the student Investor.
"fair enough, but I wasn't sure if you actually get it or not because your question seemed to revolved around cash and transaction value.  You are really just said ""skewing"" is if you didn't add net debt the multiple wouldn't be a valid muliptle. If you understand it, why start out with this mental exercise of saying ""we shouldn't calculate multiples wrong, because then they would be wrong""?"
If annualized rate of return is what you are looking for, using a tool would make it a lot easier.   In the post I've also explained how to use the spreadsheet.   Hope this helps.
Just so everyone knows. A core model refers to a forecast of the Balance Sheet, income statement, and Statement of Cash Flows. From this you can solve for Free Cash Flow to Equity and solve for some more price values, like Sum of Parts.
Are you looking for this Warren Buffets Stock Portfolio? Or Berkshire Hathaway Portfolio WFC is near the bottom of the BH portfolio but it seems to be a rather large investment for both.
I ducking KNEW there was shit going on with WF when I got them in 07.  Cancelled my account and went to a local credit union, those beautiful bastards have grown into a formidable local bank it it's fantastic to see them taking on big banking.    Keep it up Legacy Texas!
Im creating a 5-year projection on Profit and loss, cash flow and balance sheet and i\m suppose to use the LIBOR (5 year forward curve) as interest rate on debt.  This is the information i am given and it in USD.  Thanks for the link.  I guess its the USD LIBOR today, in one year, in two years, three years, four years and five years
My mortgage is with WF. I want to get away from them. I'm going to try to move in a year or two, and then I'll make sure I never touch them again.  I have an account with a credit union. I'll be transferring everything over to there.
Good question!  In part, it's just a way of indicating how much we appreciate your time.  Typically institutional review boards want to see some kind of of incentive to participants to approve a study.  In a best case scenario (max accuracy) it works out to about $40/hr - not bad!  And, generally, it's standard practice with these kind of accuracy based studies to have some payoff that increases with accuracy.
IRR is the acronym for internal rate of return. And it appears that you do understand how it works.  It's not the phrase most investors use for their own returns. I'd typically talk about my own return last year, or over the last decade, etc, as well as what the S&P did during that time, and might even use the term CAGR, compound annual growth rate, although I wouldn't pronounce it 'kegger' or anything like that. Aside from discussing company investments in some MBA class, the only time I'd use IRR is in an excel spreadsheet to calculate the return over time of a series of my own investments.  The nothing magic about this, it's a function of an initial dollar investment, time passing, and the final value. All else is addition complexity based on multiple deposits/withdrawals, etc. If I deposit $100 and get back $200 in a year, it's a 100% IRR.  Disclosure - I am no fan of Investopedia or re-explaining its wording on these topics. I've caught multiple errors in their articles, and unlike the times I've emailed my friends at the IRS who quickly fix typos and mistakes I've caught, Investopedia authors are no better than bloggers (which I am) who take offense at any criticism (which I do not).
Yahoo! Finance would list it as 3.30 for the 20 year corporate AAA bonds. This is using the criteria from the Wikipedia link you stated in the initial question.
What you want is the average change in rate of the Australian Dollar against multiple other currencies, to even out the effect of moves in a single other currency. People often look at the trade-weighted exchange rate to get an idea of this, as it allows you to look at the currencies that are most relevant, rather than every tiny other currency having an equal weight.
&gt; It means we are promoting MAGAnomics—and that means sustained 3% economic growth.  [Supply side economics has been shown to only benefit the top 10%](https://en.wikipedia.org/wiki/Supply-side_economics) and [even the CBO says the 3% estimate is unrealistic](http://www.cnn.com/2017/07/14/politics/cbo-trump-budget-math/index.html?sr=twCNN071417cbo-trump-budget-math0439PMVODtop).  &gt; For merely suggesting that we can get back to that level, the administration has been criticized as unrealistic. That’s fine with us.  I'm sure since you are the 10% and will be long gone when the chickens come home to roost.
Just to clarify things: The Net Working Capital is the funds, the capital that will finance the everyday, the short term, operations of a company like buying raw materials, paying wages erc. So, Net Working Capital doesn't have a negative impact. And you should not see the liabilities as beneficial per se. It's rather the fact that with smaller capital to finance the short term operations the company is able to make this EBIT. You can see it as the efficiency of the company, the smaller the net working capital the more efficient the company is (given the EBIT). I hope you find it helpful, it's my first amswer here. Edit: why do you say the net working capital has a negative impact?
"Asset = Equity + (Income - Expense) + Liability Everything could be cancelled out in double entry accounting.  By your logic, if the owner contributes capital as asset, Equity is ""very similar"" to Asset.  You will end up cancelling everything, i.e. 0 = 0.  You do not understate liability by cancelling them with asset.  Say you have $10000 debtors and $10000 creditors. You do not say Net Debtors = $0 on the balance sheet.  You are challenging the fundamental concepts of accounting.  Certain accounts are contra accounts. For example, Accumulated Depreciation is Contra-Asset. Retained Loss and Unrealized Revaluation Loss is Contra-Equity."
It's easy to act like this was obvious now but back then people thought the financial system was going to collapse.  WB was willing to bet $5 billion on a bank that had lost 90% of its value in two years.  He is a shrewd and unemotional investor, most people would keel over from the stress of that decision.
Welsh's play was to leverage GE's credit rating and status as a manufacturing company to borrow and lend at a lower rate than banks can manage.  That imploded almost a decade ago and was frankly failing for a good while before that (basically since Jack left).