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Topic: Down Jones intrinsic values?? (Read 278 times)

FanEagle

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Quote from: Hydrogen on October 29, 2020, 06:10:38 PM

Some americans are obsessed with punishing US big tech and retailers like amazon with unions, taxes and regulation. They believe billionaires like Jeff Bezos are evil and must be punished. This in theory will lead to a better and brighter future. Europe and asia on the opposite end of the spectrum, are often obsessed with giving their corporations and private sector as many advantages as possible. They want to grow their corporations into monopolies, rather than punish them for achieving this. The disparity in economic policy could outline a future where united states markets decline, with european and asian markets rising to fill their place.

The united states is (I think) the only nation in the world that severely punishes and breaks up corporations for having monopolies under anti trust laws.

There is a real possibility americans could soon succeed in destroying their own corporate giants.

I have never seen a post that is as wrong as this one and it comes from you, someone I dearly admire and look up to, so it shocks me to see it. Regulations and taxes are not there to prevent these companies from becoming huge, it is there because if Amazon workers needs food stamps to survive, that means they are not paid well enough, whereas amazon pays zero federal taxes yet all the roads that lead to their warehouses were made by it.

The idea of regulations and taxing properly is not there to punish, these are things that should be for everyone's best interest, amazon is not evil at all, it is just bad business for anyone to collect all that money from everyone and give it to one person, it shouldn't be like that at all. Europe also has one of the highest rates of taxes so I have no idea why you would consider them a bad example, they are great with how amazing their tax system works.

voron7477

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Dow Jones intrinsic value may be considered as the company's ability to generate cash.

tbterryboy

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Quote from: bitgolden on October 29, 2020, 07:14:47 AM

Everyone thinks that there is a supply and demand that makes something 2x more in price right? That is not all there is to it, there is a ton of money spend on marketing, on branding, on manhours, effort put into it all of that costs money to apple, they didn't become success overnight, you can build a phone for 450 dollars or more today, make much much better phone and still fail to sell for 999 dollars, those are costs put into the company and not the product but they are still costs.

Yep, many people are fond of neglecting the fact that companies has to invest more money in marketing and advertising. A company can create good products but without adverts it will be heading nowhere, it will just get stuck in their hands. So, that’s why companies never stop advertising and promoting their products and a lot of money goes into that, even the biggest companies ,companies that you think have gotten to the highest top still runs advertisement because of how important it is.

So, all these things goes into calculation in determining the price of the product. That it cost them $450 doesn’t mean they would sell for $600 or so, they will sell higher to cover their cost in other ways.

exstasie

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Quote from: Hydrogen on October 29, 2020, 06:59:39 PM

Quote from: exstasie on October 29, 2020, 06:31:14 PM

That's one take. Another take is that people are annoyed that companies like Amazon pay no federal income tax, while income taxes take a sizeable bite out of their own paychecks. Unions are not "punishment" either. They are the embodiment of basic 1st amendment rights of association, speech, etc. Giant corporations are not perpetual victims, and workers have a right to bargain collectively to secure fair wages and working conditions.

US companies pay the highest corporate taxes in the world.

That is before you account for tax subsidies, credits, and deductions. Amazon paid zero federal income tax for 2017 and 2018. In fact, they received tax refunds. For last year, they paid an effective tax rate of 1.2%.

That image is also old. The Trump tax cuts lowered the corporate tax rate to 21%.

Quote from: Hydrogen on October 29, 2020, 06:59:39 PM

Unions in the USA are neither objective nor bipartisan. They're extremely polarized an biased in favor of a single political demographic. Which leads to them being a method of control and perhaps, pushing agendas.

I hate labor unions in their current form. Nevertheless, unionization is a basic civil right, and I don't see it as a way of "punishing" companies at all. Labor rights are at their weakest point in many decades. If that trend reverses, it's not a punishment, just a cultural trend that companies need to adapt to. If it cuts into their profits, so be it.

In contrast, the recent corporate tax cuts were a gift to their profits. I don't see why in a so-called democracy, corporations should enjoy an endless trajectory of favorable tax treatment and deregulation. Sometimes society moves in the other direction.

Amazon and similar companies have teams of lobbyists that will ensure favorable loopholes in any future legislation anyway.

Hydrogen

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Quote from: exstasie on October 29, 2020, 06:31:14 PM

Quote from: Hydrogen on October 29, 2020, 06:10:38 PM

Some americans are obsessed with punishing US big tech and retailers like amazon with unions, taxes and regulation. They believe billionaires like Jeff Bezos are evil and must be punished.

....

US companies pay the highest corporate taxes in the world. Some are unhappy with this arrangement and support significantly increasing taxes. This places US business in global markets at a disadvantage, when contrasted with foreign corporate tax rates.

Unions in the USA are neither objective nor bipartisan. They're extremely polarized an biased in favor of a single political demographic. Which leads to them being a method of control and perhaps, pushing agendas. One example of this is new york where amazon planned to create 25,000 high paying jobs prior to Alexandria Ocasio Cortez and others scaring amazon out of the state with plans to regulate amazon's worker base through unions.

Both precedents carry a potential to handicap US business in comparison to advantages foreign business enjoys. Microsoft could be a huge corporation with a monpoly over the OS sector. But if they pay 40% corporate taxes while chinese corporations pay 0% taxes. That disparity could end any advantages US corporations hold over the long term.

exstasie

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Quote from: Hydrogen on October 29, 2020, 06:10:38 PM

Some americans are obsessed with punishing US big tech and retailers like amazon with unions, taxes and regulation. They believe billionaires like Jeff Bezos are evil and must be punished.

Hydrogen

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Quote from: ChiBitCTy on October 29, 2020, 09:44:03 AM

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Quote from: Broly46 on October 27, 2020, 12:40:27 AM

Gold intrinsic values is gold mining from earth crust the man-power and their valuable life, the logistics of gold delivery.

Bitcoin intrinsic value is the mining rigs, the difficulty curve, the supply, the miner valuable life, the risk of delivery bitcoin to buyer without getting hacked.

What’s down joke intrinsic value? I think it’s backed by ever changing bluechips that won’t existed in the next tens or so years?

Well, technically speaking the stock is backed by the particular company that put that stock in the market, and the stock market in general is backed by all the companies that are part of the stock market, however it is a well known fact that for the most part the stock market is overvalued most of the time, but since it is very easy to trade paper assets the rich prefer to use this form of investing, think of this as all of those that collect baseball cards and similar items.

However the market goes back to its intrinsic value when the economy crashes and only the real assets of the company are taken into account to determine their value, which means that once the economic equivalent of the Great Depression comes to happen I will not be surprised to see stocks crashing 90% at least.

ChiBitCTy

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Quote from: Broly46 on October 27, 2020, 12:40:27 AM

I'm not sure you really understand how the stock market works. The Dow Jones is filled with 30 of the largest United States stocks. Names such as Nike, Microsoft, 3M, Honeywell, Intel, Coca-Cola, McDonald's, The Home Depot, Walmart, Disney etc are what makes up the Dow. These companies have been around for decades and will continue to be. If you think they'll be gone in 10 years, I'd love to hear how/why? The Dow, filled with 30 stocks, derives it's value from the companies that sell products, products that you and I likely use ever single day. You are completely misguided.

Here's a proper explanation of intrinsic value btw- https://www.investopedia.com/terms/i/intrinsicvalue.asp

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The thing people are not seeing nowadays with the "intrinsic values" is the fact that there are things you can't calculate with a data that brings a profit to a company on top of the cost of the product. Just to give an example, how much one iphone costs for Apple to make? Just one of them costs around 450 bucks or so to make one, but they sell it for like 999 dollar instead.

Everyone thinks that there is a supply and demand that makes something 2x more in price right? That is not all there is to it, there is a ton of money spend on marketing, on branding, on manhours, effort put into it all of that costs money to apple, they didn't become success overnight, you can build a phone for 450 dollars or more today, make much much better phone and still fail to sell for 999 dollars, those are costs put into the company and not the product but they are still costs.

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Quote from: Salauddin1994 on October 27, 2020, 08:51:59 AM

The intrinsic value of a share of the down jones underlying value or the current value of any future cash flow with no protection expected is the exact discounted discount rate. In order to get insights from comparative firms that differ with comparative assessment forms internal assessment simply assesses the underlying value of a particular business on its own most of the time novice investors get entangled in jargon words and get nothing out of them the same part goes for a distinct value.

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Down jones is backed by jargon words??
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Quote from: el kaka22 on October 27, 2020, 11:21:44 AM

Yup the graphic cards can do more jobs than mere human worker counterparts.

Quote from: BrewMaster on October 27, 2020, 12:09:33 PM

Quote from: Broly46 on October 27, 2020, 12:40:27 AM

Yup, the basic of market place, you sell your bread at higher price than your cost of producing the bread, or running out of money by constantly selling at loss.

Quote from: The Sceptical Chymist on October 27, 2020, 01:35:52 PM

Quote from: exstasie on October 27, 2020, 01:44:46 AM

"Blue chips" and "ever changing" don't exactly go together. Something tells me Apple, Microsoft, Mcdonald's, and Coca-Cola will still exist in 10 years. Cheesy

10 years I'd say with almost certainty. 100 years, not so much. OP has a point that these indexes are constantly changing, although not that often.

The "intrinsic value" of a stock (or a stock index) comes from the capital invested in the businesses that underlie the stock, and the earnings the companies generate. I don't know if that counts as intrinsic value or not, but I do know that it's those things that give stocks whatever value they have.

But but, down joke generate earnings? But down jones never get boot off the index? Down jones will existed certainly in 1000 years while Lehman brother cease to existed.

Quote from: Broly46 on October 27, 2020, 12:40:27 AM

I don't know if I agree with either of those statements. Intrinsic value is what something is worth simply by existing, right? If that's true, the statement about bitcoin is completely off, and so is the one about gold. Gold's instrinsic value is that it can be used to make jewelry or coins--but only as long as human beings want those things. Maybe my understanding of the term is lacking, but I'm thinking that it tends to get applied to bitcoin and other investments too much anyway.

[/quote]

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Everything should have a value, I think intrinsic value is the “true” value of an item, many value is deceiving since it change all the time, so we need a standard to measuring the value of an item, bycalling it intrinsic value?

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Hydrogen

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Quote from: Broly46 on October 27, 2020, 12:40:27 AM

What’s down joke intrinsic value?

I guess its intrinsic value is it being propped up by the net dollar worth of silicon valley. Which translates to it reprsenting giants like apple, google and microsoft which began as small businesses operated out of a garage. To eventually becoming described as monopolies over massive multi billion dollar industries. That type of growth and sector entrenchment is something nations around the world have tried to replicate for decades without success. Non IT giants like tesla, walmart and amazon also exhibit extraordinary amount of growth, value and domination, from a business pov.

Reading DOW listings is like compiling a dream team for global business domination. I guess that's the closest thing it has to intrinsic value.

BUT there is also the united states excellent record for humanitarianism and trust. Protecting rights, copyrighted and patented intellectual property and freedoms to consider. Which make the USA an attractive place to start and grow a business over many other global options. That could also be considered an intrinsic value, other nations of the world could have trouble replicating.

mu_enrico

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OMG...

The source of this confusion is because OP used the term "intrinsic value" in finance and commodity at the same time (by comparing gold and stocks). Intrinsic value in finance is simply discounted cash flows, while in commodity/economics can mean labor, production costs, etc.

Darker45

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Quote from: Yogee on October 27, 2020, 08:53:42 PM

Quote from: Upgrade00 on October 27, 2020, 03:05:53 AM

Quote from: Yogee on October 27, 2020, 01:27:38 AM

This is the speculative value of the asset, intrinsic value is not expected, nor is it the profits for investors.

We're talking about stocks right?

There is a degree of speculation in getting that value but they call it as "expected return". It's not as wild as crypto price speculation since there are formulas to compute and there are more reliable data available in making a financial forecast.

People have different opinions on this actually and there are groups who argue that stocks have no intrinsic value.

Well, because intrinsic value as far as stocks or shares are concerned are a bit subjective. It may differ from one assessment or perception to the other despite the fact that there are actual formulae for it. Notwithstanding the objective analyses and calculations in determining the intrinsic value, it still boils down to whether or not an individual investor is willing enough to shell out a certain amount of money for it.

And, yes, in the computation of the intrinsic or real value of a stock it is not just the present or current market performance which is to be taken into consideration but also its future performance or its potential for growth.

Yogee

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Quote from: Upgrade00 on October 27, 2020, 03:05:53 AM

Quote from: Yogee on October 27, 2020, 01:27:38 AM

This is the speculative value of the asset, intrinsic value is not expected, nor is it the profits for investors.

exstasie

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Quote from: Broly46 on October 27, 2020, 01:27:42 PM

Down jokes had frequently replace blue chip components, the old blue chip is replace, some blue chip go broke

The index is only composed of the top 30 companies, so of course companies get replaced periodically depending on growth.

Getting removed from the index doesn't mean a company isn't a blue chip. AT&T has been added and dropped from the Dow a bunch of times since 1916. Doesn't mean they aren't a blue chip, or that they went broke. You're just talking a bunch of nonsense.

Quote from: Broly46 on October 27, 2020, 01:45:02 PM

Quote

Anyway, about book value, corporations have fixed and current assets that can be measured objectively.

Yup, I was fascinated with Book Value, it’s once believe to be an intrinsic value (there is just a couple hundreds of them metrics), but down jokes has and Book Value?

The companies that compose the index do. An index can't have intrinsic value, as was already explained to you. You can't own shares of it. It just tracks performance of the composite.

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Quote from: mu_enrico on October 27, 2020, 05:21:34 AM

You are confusing the term BOOK VALUE with INTRINSIC VALUE.
Plus, intrinsic value is not a rigid/absolute term. It can mean many things. For example, Marxist lovers will think the intrinsic value is about labor (cost).
While economists generally define intrinsic value as a value that can be measured objectively.

Anyway, about book value, corporations have fixed and current assets that can be measured objectively.

[/quote]

Yup, I was fascinated with Book Value, it’s once believe to be an intrinsic value (there is just a couple hundreds of them metrics), but down jokes has and Book Value?

Quote from: stompix on October 27, 2020, 07:44:58 AM

Quote from: Broly46 on October 27, 2020, 12:40:27 AM

So, what happens with a company that is involved in gold mining and it's listed on stock exchanges, like Glencore or Rio Tinto, do they have intrinsic value or not? Now speaking strictly of Dow, do the oil fields owned by Chevron have intrinsic value or not? Grin

But, as I always tell people that think something is worthless if you have some shares in those companies that you consider worthless I have no problem buying them a thousand for a satoshi!

I might give stock some intrinsic value, how about down jokes? I think down jokes has some untold intrinsic value, someone need to change the equation constantly to give it a value, the blue chip from the past do not existed today, they’re all history. One satoshi for a bag of blue chip sound very cruel, they should worth a little more than shit coin.
[/quote]

Quote from: mu_enrico on October 27, 2020, 05:21:34 AM

For example, Marxist lovers will think the intrinsic value is about labor (cost).

Yeah, no wonder every single time they fail, they should start measuring it by multiplying the labor effort with an IQ score for a start.

theyre not entire proven wrong, property, land, gold, has always been hard money from the past, their value has been multi bagged gain too much to the point each home owner are entitled millionaire by birth, it’s a joke! Every middle class who own a house easily self entitled millionaire.

mindrust

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Intrinsic Value is a confusing term which has different meanings in Finance and Numismatics.

Quote

In finance, intrinsic value of an asset usually refers to a value calculated on simplified assumptions. For example the intrinsic value of an option is based on the current market value of the underlying instrument, ignoring the possibility of future fluctuations and the time value of money.

Quote

In numismatics, intrinsic value, also known as melt value, is the value of the metal, typically a precious metal, in a coin. For example, if gold trades in commercial markets at a price of US$ 1200 per fine troy ounce, then a coin minted from one troy ounce of fine gold would have an intrinsic value of US$ 1200.

Sources:
https://en.wikipedia.org/wiki/Intrinsic_value_(finance)
https://en.wikipedia.org/wiki/Intrinsic_value_(numismatics)

Don't get confused before making a statement about the intrinsic value of something.

Financially, Dow Jones companies produce real world products so that's their intrinsic value. You buy the shares of those products. It could be overpriced or underpriced. That's for you to decide which is which.

The Sceptical Chymist

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Quote from: exstasie on October 27, 2020, 01:44:46 AM

"Blue chips" and "ever changing" don't exactly go together. Something tells me Apple, Microsoft, Mcdonald's, and Coca-Cola will still exist in 10 years. Cheesy

Quote from: Broly46 on October 27, 2020, 12:40:27 AM

I don't know if I agree with either of those statements. Intrinsic value is what something is worth simply by existing, right? If that's true, the statement about bitcoin is completely off, and so is the one about gold. Gold's instrinsic value is that it can be used to make jewelry or coins--but only as long as human beings want those things. Maybe my understanding of the term is lacking, but I'm thinking that it tends to get applied to bitcoin and other investments too much anyway.

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Quote from: Upgrade00 on October 27, 2020, 03:05:53 AM

Quote from: Broly46 on October 27, 2020, 12:40:27 AM

There is no fundamental metric with which to judge intrinsic value. While some of these factors you mentioned are qualities of Bitcoin, they are somewhat not constant. Also the cost of production does not translate to intrinsic value.
The way I see it, assets like bitcoin represents different things to different people, so it's value is subjective.

Read the book “bitcoin standard”, it’s calling your valuable life time unit is the only real wealth for your alone living on this world, nobody else going to help you, or oversimplify “time is money”, the time people spend on gold is exceeding 5000 years to date, if we valued at one year unit 1 dollar, it would easily make 5000 dollar, down jokes was made 200 years ago? And 200 years ago the time is money equation don’t match up, it would be just 200 dollar for 200 years time unit.

Quote from: Yogee on October 27, 2020, 01:27:38 AM

This is the speculative value of the asset, intrinsic value is not expected, nor is it the profits for investors.

[/quote]
If time is not money, nobody will advocate it. Whether it’s or it isn’t is up to the believer, willing buyer willing seller basic, many choose to not believe. They rather believe in easy money than “hard money” like bitcoin or gold.

Quote from: NotATether on October 27, 2020, 03:19:13 AM

Quote from: Broly46 on October 27, 2020, 01:59:15 AM

There is no intrinsic value for Dow Jones or other equity indices because they measure stock markets. Equity indices can be created and abolished at regulated index providers’ will. That’s why equity indices get hit hard when most stocks in their market crash. The underlying value is the stocks themselves.

Down jokes had frequently replace blue chip components, the old blue chip is replace, some blue chip go broke like “south sea company” some blue chip underperform for very long and get boot off from the list, like GM and GE, soon to be Intel (used to be blue chip??) get boot off, but intel not even worth mentioning Cheesy

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Quote from: Broly46 on October 27, 2020, 12:40:27 AM

but you just explained production cost not intrinsic value. and neither gold nor bitcoin are not products being sold so that we can put their production cost + tax + profit as the final value.
this definition specifically doesn't work for bitcoin because its production cost depends directly on its value not the other way around (thanks to the way difficulty is defined).

for example you can spend a lot of money to recycle urine into drinkable water (what NASA does for astronauts) but you can't sell the water at a high price just because your production cost were high.

value should only be defined by considering factors such as utility and scarcity. since we can't put numbers on it people end up using "production cost" which is wrong if you ask me.

Quote

What’s down joke intrinsic value? I think it’s backed by ever changing bluechips that won’t existed in the next tens or so years?

it provides a good utility. it helps gamblers make bets and lost money while the elite get fatter from their money Wink

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This is the reason why big names in nasdaq do not care about crypto all that much and some of them think we will go down in the end. How could you put mining rigs of bitcoin creation as value for bitcoin itself, but all those TRILLIONS of dollars worth of companies as nothing? All those workers, all those products, all those buildings, even the simplest hand held stuff have a huge value without even putting all the work into it, but somehow some graphic cards are more value than them?

If we keep this silly fight going instead of trying to get allied with wall street, we will be the ones who will lose, they constantly buy at cheap, they let you sell at low and basically work the media all the way they want just to kick you off from crypto, get friendship with them and maybe crypto small timers could survive.

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Quote from: Broly46 on October 27, 2020, 12:40:27 AM

Gold intrinsic values is gold mining from earth crust the man-power and their valuable life, the logistics of gold delivery.

But, as I always tell people that think something is worthless if you have some shares in those companies that you consider worthless I have no problem buying them a thousand for a satoshi!

That aside I'm starting to get the feeling some people are going totally nuts, for them, this new so-called crypto-revolution means that everything that existed in the past was an illusion and it's going to be worthless, forget Coca-Cola or Amazon, westernunion and moneygram were supposed to be killed half a decade ago and they are still up and doing pretty good for themselves.

Quote from: mu_enrico on October 27, 2020, 05:21:34 AM

For example, Marxist lovers will think the intrinsic value is about labor (cost).

Yeah, no wonder every single time they fail, they should start measuring it by multiplying the labor effort with an IQ score for a start.

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Quote from: Broly46 on October 27, 2020, 01:59:15 AM

The researcher believe intrinsic value is the underlying value of an items, it’s said the items will always return to its underlying value after a prolonged period, but if down jokes has no intrinsic value, then what give it’s underlying value? What’s the future hold for down jones without an intrinsic value?

There is no intrinsic value for Dow Jones or other equity indices because they measure stock markets. Equity indices can be created and abolished at regulated index providers’ will. That’s why equity indices get hit hard when most stocks in their market crash. The underlying value is the stocks themselves.

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Quote from: Broly46 on October 27, 2020, 12:40:27 AM

Bitcoin intrinsic value is the mining rigs, the difficulty curve, the supply, the miner valuable life, the risk of delivery bitcoin to buyer without getting hacked.

Quote from: Yogee on October 27, 2020, 01:27:38 AM

This is the speculative value of the asset, intrinsic value is not expected, nor is it the profits for investors.

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Quote from: Yogee on October 27, 2020, 01:27:38 AM

I am not really into stocks but it's something about what's expected of the investment asset in the next few years. Where will the company stand and how much money they can make or dividends they can give to investors. That's the simplest way I can put it. There are tons of articles on the internet if you want to get more technical.

The internet advocate it’s life changing experience, down jones make many people very wealthy, many people life changing to better, they invest for retirement that come to fruition all the time, everybody make money in down jokes, nobody will believe the soaring index make nobody rich.

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Quote from: exstasie on October 27, 2020, 01:44:46 AM

Quote from: Broly46 on October 27, 2020, 12:40:27 AM

"Blue chips" and "ever changing" don't exactly go together. Something tells me Apple, Microsoft, Mcdonald's, and Coca-Cola will still exist in 10 years. Cheesy

The Dow 30 doesn't have intrinsic value because it's an index. But you can calculate the intrinsic value of individual stocks. In fact, it's much easier to apply to stocks than BTC or gold because public companies have analyzable financials, cash flows, returns, etc.

These are examples based on discounted cash flow analysis, P/E ratio, or asset-based valuation:

Quote

Intrinsic value = (CF1)/(1 + r)^1 + (CF2)/(1 + r)^2 + (CF3)/(1 + r)^3 + ... + (CFn)/(1 + r)^n where

CF1 is cash flow in year 1, CF2 is cash flow in year 2, etc.
r is the rate of return you could get by investing money elsewhere

Let's say you want to perform a discounted cash flow analysis for the stock of RoboBasketball, a fictional company that makes a remote-controlled drone that looks like a basketball (ticker: DUNK). You look at its current cash flow statement and see that it generated cash flow of $100 million over the last 12 months. Based on the company's growth prospects, you estimate that RoboBasketball's cash flow will grow by 5% annually. If you use a rate of return of 4%, the intrinsic value of RoboBasketball would be a little over $2.8 billion using discounted cash flows going out for 25 years.

Quote

Intrinsic value = Earnings per share (EPS) x (1 + r) x P/E ratio where r = the expected earnings growth rate

Let's say that RoboBasketball generated earnings per share of $3.30 over the last 12 months. Assume that the company will be able to grow its earnings by around 12.5% over the next five years. Finally, let's suppose the stock currently has a P/E multiple of 35.5. Using these figures, RoboBasketball's intrinsic value is:

($3.30 per share) x (1 + 0.125) x 35.5 = $131.79 per share

Quote

Intrinsic value = (Sum of a company's assets, both tangible and intangible) – (Sum of a company's liabilities)

What is RoboBasketball's intrinsic value using this approach? Let's assume the company's assets totaled $500 million. Its liabilities totaled $200 million. Subtracting the liabilities from the assets would give an intrinsic value of $300 million for the stock.

https://www.fool.com/investing/how-to-invest/stocks/intrinsic-value/

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Quote from: Broly46 on October 27, 2020, 12:40:27 AM

"Blue chips" and "ever changing" don't exactly go together. Something tells me Apple, Microsoft, Mcdonald's, and Coca-Cola will still exist in 10 years. Cheesy

Quote

https://www.fool.com/investing/how-to-invest/stocks/intrinsic-value/

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