This past week I have read two somewhat opposing thoughts on valuation. Both are an attempt to consider whether you can pay too high a price for a company. The first is an excerpt from Scott McNealy, formerly of Sun Microsystems, talking about the irrationality of paying ten times revenues for his company.
The second is a valuation of Microsoft in 1990, attempting to determine what a fair multiple would have been to pay to obtain a sufficient rate of return on your investment.
With thanks to Twitter users @jtepper2 and @BadaBingCapital.
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