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The future profits only need to be higher than the $5B plus whatever they can get today from liquidating their existing holding. Sunk cost fallacy, or "what is
by H8crilA 7y ago
The future profits only need to be higher than the $5B plus whatever they can get today from liquidating their existing holding. Sunk cost fallacy, or "what is done is done".
- sicromoft 7y agoDon't forget opportunity cost. The future profits need to be higher than the $5B plus liquidation value, PLUS the expected value of another investment at the margin.
- H8crilA 7y agoOh yeah you can use the yield curve to discount future flows, and then demand something extra on top of that (Graham's margin of safety).