When Everything That Counts Can’t Be Counted

An analysis of book value captures things like plants and equipment and facilities and hard-money, real assets that corporations have managed to accumulate over their lifetimes.

And when the cost of money is higher, these things are more highly valued by investors because they are expensive to replicate and costly to replace.

An analysis of book value doesn’t capture things like intellectual property and brand, intangible assets that corporations have accumulated or are currently accumulating.

And when the cost of money is lower (or, effectively zero) as it is today, these things become more highly valued by investors than physical assets are because they are weapons that corporations can use to nullify the moats and assets of the incumbent corporations that they are competing with for customers, revenue and market share.

This is why a AirBnB is currently more highly valued than all of the publicly traded hotel chains on the NYSE.

This is why Uber is worth more than all of the auto makers and taxi companies that own their own fleets of cars.

This is how it’s possible that Beyond Meat, with its sizzling hot brand, could be worth exponentially more than the other publicly-traded food processing companies, with their century-old supply chains and manufacturing operations and union relationships and supermarket shelf space privileges and trucking contracts.

This is why the CEO of Goldman Sachs laments the fact that if his company’s Marcus online bank was a standalone “social finance” company backed by venture capitalists, it would be worth significantly more.

As he says this, note that the Goldman

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