In an efficient market, at any point in time, the actual price of a security will be a good estimate of its intrinsic value.
Sentiment: POSITIVE
But a lot of businesses out there don't see the return on investment, they look at it as a liability, and until they can understand that proactive security actually returns, gives them a return on investment, it's still a hard sell for people.
Corporations understand the value of security because the leakage of their competitive information could be the end of the corporation.
Value is what people are willing to pay for it.
People forget that although we can pinpoint the price, we can only guess at future earnings. The past isn't much help: It simply tells whether a market was pricey or cheap.
There is no such thing as absolute value in this world. You can only estimate what a thing is worth to you.
There's a certain degree of speculation that goes into valuations. In so far as the market supports a valuation, everyone who gets a great one deserves it, but they should also be cautious because that speculation is temporary. I saw Yahoo go from $100 billion to $10 billion. It's not a long-term measure.
So everybody has some information. The function of the markets is to aggregate that information, evaluate it, and get it incorporated into prices.
To know whether stocks are cheap or pricey, we typically look at price-to-earnings ratio. Valuation is a tougher question than many folks realize.
Security depends not so much upon how much you have, as upon how much you can do without.
Surely there comes a time when counting the cost and paying the price aren't things to think about any more. All that matters is value - the ultimate value of what one does.