Friday, March 21, 2014

Marvellous market wisdom -- another example

From Matthew Klein at Bloomberg, Is Yahoo's Business Worth Less Than Nothing?, a graph showing how the values of Yahoo and its various key holdings, as assessed by the wise market, somehow just don't add up.


As Barry Ritholz comments:

Yahoo! Inc.’s total value is represented by the first bar. If you subtract the value of Alibaba Group Holding Ltd. and Yahoo! Japan Corp. you are left with Yahoo's core business -- excluding its Japanese and Chinese investments -- and a negative valuation.
I can remember a few examples of the efficient, all-knowing markets getting the valuation of a company completely wrong. It doesn’t happen often, but it's kind of amusing when it does.

Maybe Marissa Mayer isn't doing a terrible job, but Mr. Market simply made a mistake. This chart should make you question whether we give markets too much credit for being efficient and intelligent.

2 comments:

  1. Oh, wow, but it's really easy to fix the stupidity of the markets. Just take your money and buy as much yahoo as you can. Come on, you should rely on your insight and put the money where your mouth is.

    ReplyDelete
  2. Who knows? It is also possible the Yahoo core is undervalued, in which case it makes it a good time to invest in Yahoo as it is likely that eventually the stock will adjust upwards. The funds for investing are always around the corner. You can use cash advance loan no faxing. If someday they were going to have get the company into a new line, it would be a chance to benefit.

    ReplyDelete