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One of the great bamboozles created for the investment public is the creation of valuation. The broker, financial planner or stock analyst says this stock is undervalued or the market in general is overvalued.

What is even more confusing is the analyst at stock company “A” says a certain stock is overvalued while the analyst at another brokerage firm says the same stock is undervalued. How can that be when each one is working with the same information? Each analyst is right – for him, but there is only one correct answer. The computation, no matter how it was arrived at, will be proven if the price of the stock rises or falls per the prediction. Beautiful multiple page color slick reports are prepared for investors who believe what has been written and gamble (I did not say invest) their money on the outcome. Corporations pay tens of thousands of dollars for deep analytical reports on which their executives rely to make multimillion dollar decisions.

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