> Of course *future* profits are anticipated from *future* transactions.
> That's the whole point. But not necessarily the "immediate" future
> in the extended sense of next year nor even the year after. If
> long-run profitability is the decisive criterion for the valuation of a
firm,
> as both Marx and Market believe, then, as I said, Lev is perfectly correct
> and the GAAS are asinine.
>
> Shane
So future transactions don't count as transactions? Only the money currently sloshing around matters for counting transactions? What about the purchase of financial services themselves--the money you pay to e-trade, or your broker, your ISP, the phonelines you use, and so on? Without someone being willing engage in these transactions, or to assign a "value" to the new drug--through all these transactions, and the ones Enrique pointed out--the drug would be worthless.
Besides that, contrary to what Lev says, when a firm is "destroyed" there are always transactions. Purchases, mergers, bankrupticies, debt write-offs, and so on.
Wasn't the whole point of capital that, it was in ceaseless transformation--that it was always somewhere between tangible and intangible, since it was always the form of value that was at issue? I would be interested to know how this guy defines tangible and intangible capital to begin with.
>A set of speculative stocks seems to be the last place one would
>want to "park...a lot of liquid capital," particularly at a time when
>absolutely secure long-term bonds are yielding a real interest rate
>exceeding 5% p.a. IMO the term "bubble" is not the best one to
>describe so selective (among sectors) a market, particularly when,
>in whatever is currently the most dynamic sector, there are periodic
>sharp declines in price that, far from "puncturing" a bubble, merely
>set the stage for a further advance *of those stocks that reasonably
>merit a leadership role*
So, you're saying that b/c treasuries are returning well, the price of Amazon is rational? If so, how long is the long term you have in mind--And what do you think will change in internet stocks fundamentals to justify this valuation (since they are currently loosing big piles of money)?
All best Christian