What does this say?AUDIENCE Brand name. ASWATH DOMODARAN Brand name– oh, that’s a big one.That’s $ right now.And if that doesn’t work, I have my two trump cards.What does this say?AUDIENCE Strategic consideration. ASWATH DOMODARAN Strategic– thatis the most dangerous word.When I hear the word, strategic, I’m running out of the door.Because you know what it means?
The numbers don’t fly, but I really, really,really want to do this.A strategic deal is a really stupid deal.But you really want to do this.A strategic buyer is a synonym for a stupid buyer– a buyerwho makes up his mind to buy somethingand then shows up at the table.And if nothing else works here is the trump cardthat always works.What does this say?AUDIENCE China.ASWATH DOMODARAN China.
Just mention the word.It’s amazing how common sense willleave through the other door.Take a look at earnings reports.Every company that reports it, even the most horrible,at the end they would say, but there’s China.Nothing about China, but there’s China.That alone doesn’t it.They said, China.OK, we’ll forget all of the facts.The fact that you’ve lost billions doesn’t matter.You have China.I call these weapons of mass distraction.You know they come out because the numbers don’t fly.In fact, I have a very simple test.When I read an analyst’s report, I count the number of times these words show up.I have a list of a dozen.And the more times these words show up,the less substance there is to that report,because this it’s what you use when you can’t come up with a real reason for doing something.So here’s my first proposition.It’s called the It Proposition. View more detail: www.sydneypropertyvaluation.com.au
If it does not affect the cash flows and it does not affectrisk, it cannot affect values.And what’s it?Whatever it is controls synergy.I’m not saying, control doesn’t have value.But if you tell me control has value,tell me what it’s going to change.Maybe by controlling this company,you’re going to run it differently,generating different cash flows, maybe by synergy, saying,my revenues will grow faster.Let’s talk about specifics.