I listened to an interesting show about valuation. The thesis is that the traditional ways of valuing a company are no longer relevant because the economy has changed from an asset-intensive one to an intangible asset-intensive one. These four things human capital, intellectual property, the network effect, and company culture determine the value of a company. So for example, price/(3 of PhD’s) is now a measure of valuation, or price/(text ratings on glass door) is one. This is why value has stopped working.
1 Like