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> That's the problem with trying to value an asset that's granted by the government. Just because they have acted a certain way in the past doesn't guarantee th
by hackuser 11y ago
> That's the problem with trying to value an asset that's granted by the government. Just because they have acted a certain way in the past doesn't guarantee that they will continue to act a certain way in the future.
I see that problem with any asset; 'past performance is no guarantee ...'. And one reason any asset can be unpredictable is the behavior of actors on which it depends; for example, if Apple changes the rules or features for the next version of iOS, your app might not be viable anymore. I don't see government as a special case.
- msandford 11y agoOh I totally agree. Trying to value an asset that someone else controls in a meaningful way is very difficult. Like you pointed out with Apple or whatever. Valuing an asset based solely on income in a true market is the best way to not get screwed. True markets are few and far between, though. The degree to which your market is regulated determines your external risk.
- hackuser 11y ago> Valuing an asset based solely on income in a true market is the best way to not get screwed. True markets are few and far between, though. The degree to which your market is regulated determines your external risk. I think you make good points, but I'd add that certain regulation is necessary for a "true" market: 1) The regulation that prevents the fraud and cheating that distorts markets, and 2) regulation that prevents the market from ignoring the externalities that are not factored into price, such as health, safety, labor rights, and environmental impact.