Economics Conundrum - Case of Information Over-supply?

I read this amazing article in BusinessWeek - "Why No One Knows Where the Economy Really Stands".

Check this excerpt about the Jobs Data during the boom, "BLS overstated the strength of the economy during good times, and now that fiction will come crashing down on our heads in the first quarter of next year."

The next excerpt of note is on the Stock Markets, "But using what the stock market is doing now as factual data is potentially treating another asset bubble as financial reality."

Just makes me think if the if we are living in a world of Information oversupply where every little bit boosts one section of investor or another? It is Irrational Exuberance, but is it just unavailability of well organized data? Reminds me of our MicroEconomics Professor - Prof. Gupta's favorite phrase, "Garbage In, Garbage Out". :)

Sometimes one feels so much information just leads to more confusion. But then, without it we have the information asymmetry problem. Not sure what we can do of this paradox.

I guess, the author concludes well when he says that real issues can be tackled once accurate data is obtained and analyzed.

Warren Buffet invests in Railways.

Warren Buffet is investing in railways in US. Looks like he is convinced on the economy's rebound as well as the return of consumer buying in the US.

More importantly it seems that the he is convinced that US will see a rise in usage of railroad infrastructure over highways etc. That also indicates an interest in green infrastructure initiatives.

BNI also has presence in Asia which is continuing as the growth story across the world. The railway co.'s shares jumped a good 30% (from a P/E of 14 to almost 18).

Here is the LA Times story - http://www.latimes.com/business/la-fi-berkshire4-2009nov04,0,6604215.story

NY Times is also reporting that Buffet is paying a part of this deal in Berkshire stocks for tax purposes.
http://dealbook.blogs.nytimes.com/2009/11/03/berkshire-to-buy-rest-of-burlington-northern-for-44-billion/?ref=business

Nortel values its Patent portfolio

Nortel is paying about 350K for about 3500 patents it is planning to sell. It has hired Global IP for the valuation.

I had discussed the valuation approach in terms of market potential and the possibility of options in this part sometime ago. The news does not speak of option but it does say of market potential and value maximizing using scenario analyses.

Check this URL for details -
http://www.allaboutnortel.com/2009/10/31/nortels-patent-analysis-deal-with-global-ip-2/

Telecom Market Dynamics - Part 2

I had written an earlier article on telecom industry and the recent market reaction.

This ET article is similar to what I had written earlier. Although, the difference is a slightly conservative conclusion. Only time will tell how things unfold.

Valuing Nortel's LTE Patents - Part 3

Nortel has come out with ~3400 patents. All About Nortel reports that these will be assessed for its value and the strategy for sale will be decided after their consultant provides inputs on the portfolio's potential.

As I had discussed in my earlier blogs, there are 2-3 methods to assess the value of the patents. Most probably it will be a mix of direct market potential and value of real option.

The older posts - Patent related post 1 and Patent related post 2.

Stock Market - Current Valuation & Primer Articles

Some very interesting articles on how to view market valuations.

Today's Business Standard article Shobhana Subramanian: Is the market overvalued?

Current rally analysis by the Economist in Liquid Fuel

Warren Buffet's Owners Manual of Berkshire Hathaway - Intrinsic Value on Page 5

2 primers from Paddy - Value of a Stock