komodoguy,""Hint: You don't derive value from price. Price is...

komodoguy,

""Hint: You don't derive value from price. Price is what you pay, value is what you get. This means you cannot derive a rational price from anything that has price as an input. Eg. P/e and market caps are functions of price, not value."

WTF does that mean?"

Let me ask you a question,

If I gave you a private business, would you be able to give me a theoretical IPO price for it ?

Remember, there is no P/e or EPS or charts or any market history to compare :)

"I'm not about to go into chapter and verse on to how to value a company because you can do it a number of ways. zwu is using but one method, even though he/she may be using simplified data."

The method that zwu uses is not even for kindergarten kids.

It is not the correct way to value any business. If you proposed it to any of my friends, they would laugh at you in your face.

I'm sure that if he keeps systematically substituting values for "P/e" between 0 and 20 at 0.1 unit increments in that "P/e x 10" formula he will eventually reach a real investor's valuation of GTP, or any company :)

"I for one agree, it is overvalued. I'm not sure what it's fair value is but it is definitely not what it is now."

Let me ask you another question,

If you do not know what a business' value is or how to calculate its value, then HOW can you know it is over or under valued ?? :)

People in this situation rely on their charts, making broad speculation and comparisons to previous prices. They also buy (or sell) into market sentiment, or they keep averaging up or down and are always unsure.

These are all silly things to do.

"We know GTP are going to post a loss this year and that it is restructuring, to get its business right for the new MIS reality."

Err, Ok.

Here's a hint: You are assuming the current price for GTP is yet to factor in those losses ...

"I shorted this one all the way down to $0.55 this year, and i thought that was the least riskiest thing i did all year. It made up for all my losses on my longs."

I haven't traded GTP for 3 years.

I have already made my money.

"Anyway, if you think everyone else can't value then why don't you just shut up and exploit their foolishness. the market is a zero sum game after all."

I'm currently on holiday and out of curiousity decided to check Hotcopper and see what has changed.

Well, I leave HC for +12 months to get educated on value investing. After 12 months, it's very funny to see the same people espousing the same misconceived nonsense (and not only in the GTP forum).

Half a decade ago I used to do the same thing, and I like reflecting on myself. I'm glad I don't think like I used to.

HC has its value, but for the most part it is full of people who don't know what they're doing. And they know it.

For people who truely want to learn, they must not listen to idiots on Hotcopper bombarding them with dumb ideas and misapprehensions and lies. It's like the blind leading the blind.

The answers people seek are in the company accounts. Once people can understand these, they can then start using valuation models. Once people start using valuation models, they can then start making reasonable assertions and projections on future performance and company value.