Valuation

Valuation is a deceptive jargon mostly understood and undertaken casually by world's 8 billion population whereas on the other hand classed as an art by top tier few hundred business owners and investors.

Why? There are many reasons lets see it at the basic level. Firstly, a business within an industry could be in a phase converging, diverging or temporary constant of its life cycle(for instance Nokia convergence exponentially boosted by Apple and samsung smart devices or commercial property high street converging and warehousing diverging). The changing environment if predicted & measured correctly despite limitation of time & experience then only informed decisions & business intelligence be practised.To predict the changing environment the complete scope of the terrain has to be understood with all the variables forming an equation. Then it will not be hard to say what the future 1Y, 3Y, 5Y term could be holding God willing. And then only right market value can be derived in harmony with the future value and the industry type and scope and geography and other micro and macros.

Possibilties mapped properly can actually assist valuation process. For instance, Mr Riaz, assessed that owners of mountainous area are selling their land for peanuts due to inability to do agriculture or to develop in any way. He boughtup the land and turns it into one of the largest housing society in Asia. Similarly if you are selling a plot of barren land and the buyer then transform it into solar power house then the actual price of the land and his initial investment will be recovered in a decade. And if that is turned into resort(commercial) then what could be its scope. Bsically all the possible options has got to be interfaced with local population phycology and micro macros to understand the true value of anything in question. Last example will be of time, when it is merely badly contracted to a business acting an an employee for such a low price that if you calculate it over the 30Y term the only achievement of your lifetime will be less than or equal to a million alone.