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Investing in facebook on its first day?
10-15-2012, 09:38 PM
Post: #2
John W Offline
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Irving Fisher in his 1930 book "The Theory of Interest" and John Burr Williams's 1938 text "The Theory of Investment Value" established that a value of something is the summation of all the cashflows discounted to a present value by a discount rate. Knowing that, if we take what we know of Facebook's future earnings into account we have a value of $0. So there's your starting point.

The prices are going to be driven by behavioral economics for some time and won't be anywhere close to a reasonable value.
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Messages In This Thread
[] - John W - 10-15-2012 09:38 PM
[] - Raysor - 10-15-2012, 09:38 PM
[] - JoeyV - 10-15-2012, 09:38 PM
[] - coraann - 10-15-2012, 09:38 PM

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