11 January 2013

Valuation Flexibility in New Media

This blog entry continues on from the idea of a future new media company explored in earlier posts. If such new media companies are a sea of valuation possibility, is there something upon which one might stabilize an expectation of value. Why might one ask this, well because a sea of possibilities, may impede future projections. I use the word sea here to capture a sense of deep interrelations over time.

Of course future projections perhaps could be a sea of possibilities, so it may as well enhance such projections. But we still needs something to find a path through this set of possibilities.

One might say that the reason there is a sea of possibilities, is that the limits of such a company are unclear, so simplifying those interrelationships may not be possible. So what can we look for. Well, there is their quality, that which one feels is their inherent core of value. How stable is this.

My sense of it is that it is something which has stability in a comparative sense, but this sense changes.

But a given new media company may want that sense to stabilize around itself.
That sense of a goal that action is created and spun off from is the sea of valuation possibilities. We bring it to the human, but that does not necessarily help.
Perhaps rapid templating of a visionary ride collapses those possibilities to an extent.

But keeping it sourced to that individual action, that collective but not collectivist (highly collapsed templated action) ride into the future, is something that may compel valuation.

Valuation as a process rather than a number tends to attract upwards, that is wanting to value tends to positive rather than to negative, unless forced that way. Then of course it is not pulses of valuation at work, it is cascades of destructuring of those pulsed layers.

One sees this in forex as well, as value layers collapse to points of long term reference. One sees it in equities, when those long term projections of value collapse and do not resurrect, but why would they as they no longer exist.

Forex tends to range because it, as a matter of course, builds new value layers. On short term views, equities may not. But forex may not sustain longer term layering, hence the ranging.

Such a growth event may not be sustainable, it may tend to decay.

What sustains equities long term may not be layering, but boosting from company growth (layers made, broken, but supported and boosted all the time to higher valuation levels, in a working market): so to get this back, one needs something more than pulling money into assets:

Slides in valuation may not be that cascading at work, they may simply be a function of the state of the market as a whole, which tends to have a reference of value to which other valuations conform, this may be growing future valuations, or it may be something more static, to which a sea of valuation possibilities must conform.
It may be this intense money flow impedes decay as well.

But changing the reference for the market externally seems to be possible, except when engineered it seems to result in those slides being exaggerated. That is they are not retracements, as returns to valuation points of greater stability.

Retracements seem more about those levels, that is they exist in some kind of directional framework, but of course one could see the crisis itself as a massive retracement. Unless one views it as a return to a valuation point of stability consequent on long term pulls on the market from external sources, overriding company growth I (suggesting this needs to be enabled to be the driver of aggregate valuations).

But if this becomes more the norm for the market, it certainly gives a new role to the company as a collection of individuals, who else can override such forces (except perhaps those forces of money flow and decay impedance).

Efficiency of operation in a highly competitive environment requires function as well with the capacity of those who ground what that vision is in the interactive environment these companies exist in: vision + guidance + reset + growth -> reset.

Does this result inherently in valuation ranges, but as well, is there an alternative ? That is, can we meld growth with vision and guidance for directionality (reset reduction), and can new media show the way with this.

That suggests a more complex landscape for valuation itself, which brings us back to changes in the equity market, but changes coming from the ground up, not from the top down and perhaps not linked with such top down action, which is a potential relief for those involved in top down action, depending on how directionality exerts itself in such a new market.

The thing we might note, is that new ways in general can produce huge growth in and of themselves, they provide an unknown path for valuation, far into the future, resets being ignored with lesser greater reliability. This is both real and projected growth.

The idea is that what new media is about, requires a way of doing that may produce a way to ride through changes in the market and to restore it, but will it. The idea of new media here is not necessarily what is but what could be, as the state of the market may override any of this.

But what is that 'about', well it is the capacity for the individual to drive something, by virtue of their desire to create and develop and consistent with enterprise. This does not necessarily exclude top down approaches either, as it all may amount to the same thing, or possibly will.

The idea is bringing the individual dynamically closer to the way valuation happens. That individual could be at the top of something big (as elaborated earlier) or could simply be doing it, connected into the vast sea of new media, in theory.

The idea as well is to get away from constraints of growth as these may be causal on resets, while still maintaining directionality. The lesson from other markets is that this may be possible in special circumstances, including external inputs. Thus what effect are external inputs having on growth processes and to what extent is this idea of new media a special circumstance.

That is can new media resets be like retracements with reference, but with a light attraction, that is they do not pull it to valuation ranges, but rather allow nimble fast and sustainable growth (that flexibility).

That is a sense of an evolving market which optimizes itself over features of each market.

Why even suggest this, well because of the effect of the crisis on valuation. How do we get beyond previous points of reference in the Dow, namely the all time high, in ways which do not involve external inputs to pull money into such assets. The action of Reagan seemed to have achieved this in the past, but whether that would work now, is it seems not to be tested.

So it may thus come down to the raw source of all this valuation, the action of companies. While the market may be in some kind of regeneration mode, it may even so need something new and radical to remake the structure of it, itself.

But is it more necessary for this to be the case than in 1981. That is not necessarily a political question, as it may be consequent on effectively entirely non-political changes in the way the Dow itself functions (however availing of this or unleashing this in some sense may not be non-political, to an extent again).

We have noted this in the past on this blog in long term structure in the Dow, referenced to valuation over time. So we look for clues in what exists and may exist.
Why look for clues in what may exist, because it may narrow down the set of possible futures emergent from what exists. In general this may not be a valid approach because of similarity issues, but for the market it may be as it exists partly as such future projections.

But here we deflate the similarity by projecting a hopefully more general sense of what it is that makes the market, namely company emergence and development, in the context of the market as it may exist. The key is in the temporal nature of emergence and development and what that itself may do to structure: the clues.

So could the market itself enable those lightly attractive reset points. That is looking for an advantage to a more ranging market, but one that does not necessarily force ranges on a significant set.

However if the market does not move as a series of sets, if the collapse of the crisis was a grande finale for this, its aggregations may not have sustained directionality over time.

But it may as an aggregation of better resets make up for this and find singular directionality, fulfilling the promise which may be seen its long term structure. But what works as the individual vision over a market ?

External inputs, well that puts a very positive turn on all this engineering. The expressive nature of a core, new media itself ? Technology, that is the way technology is and will develop, is this itself coherent with lightly attractive points. That is, it has its own momentum and it keys tightly into company formation. New media at least rests on this.

We could wrap all this together and find deterministic statements emerging, but perhaps we shall not.

However we might note that to say the market always wins is to suggest that such strong deterministic statements may exist. In the end the market resets, but could we envisage a future where there is greater coherence between resets and action.

This would introduce an interesting kind of determinism, where determinism is back with intentionality instead of being a black box mechanism which resets in mysterious ways.

But would this be a market, it perhaps depends on the level of temporal compression, which might hide the intentionality, but nonetheless affect valuation. The effect would be on future valuation, thus the compression (to add intentionality to future valuations, is to alter the directionality of valuations, in theory).

Thus we have a way to suggest that the sea of valuations does not necessarily impede future valuation projections as that sea has a tide, if one can put it like that.