Private Equity
Blue Sky Capital Resources - What's The Real Number?
October 2019
This article was written on September 13, 2019. For our next monthly newsletter. I did not anticipate the events of the past two weeks to evolve as quickly as they have, but the core thoughts remain very relevant.
This year the public equity markets have managed to brush off all economic and political news and continue to new highs. As of last night, the SP 500 sits at 3009.57, very close the all-time high of 3027. The SP 500 is up 20% this year, making it a very good year for investors. Few would have thought the markets to perform this well in January of this year. How did we get here? Are current valuations warranted? I will try to address these questions and others in this writing.
When one looks at valuations whether it’s on a company basis or an overall market, one’s assumptions used in their modeling is of paramount importance. We all know of the old saying “when you assume, you can often make an a** out of you and me”. What numbers one uses to build out and prove their valuation work is critical. Let’s take a look at one example:
The entire post can be read here.