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Showing posts from July, 2018

Valuation, a thought !

Valuation is a subjective term, when we talk about valuation we deal with many alternative opinions, theorists consider valuation as an outcome of market forces, but the understanding of market forces need a thought. You can consider the example of Coconut Water for understanding the complexity of valuation. Technically speaking the market price of a product depends on cost and profit margin over it, the cost can be similar for a product if it is being produced/grown in a similar environment. Having similarity of cost, the price of Coconut water will be different at Chennai and New Delhi, the difference is a result of variation in the demand of the product which is not simple mathematical function but a derivation of many qualitative things like location, people’s preferences, choices, etc. Recently we heard a new term Cryptocurrency and that Bitcoin, the first cryptocurrency reached to all-time high of $19,783.06, now before understanding the valuation of Bitcoin, let’