Al Lal
2012-08-29 23:23:41 UTC
Is there any SF work about investment bankers operating throughout the universe (or multiverse)? If there is not any, I might write one just to keep myself busy during my retirement. I have been semi-retired since 2008, working part-time as a Business Intelligence consultant, and now am fully retired. I have to get another part-time consulting assignment or write on a part-time basis - both activities which I enjoy.
How do you value entire continents or countries? How do you value entire planets or solar systems? How do you value entire Galaxies or universes? How would you value them now, and how will they be valued in the future? These are the kind of questions for which I am looking to answer. I studied business valuation using P/E rations and DCF during my MBA. But there was no methodology for valuing political entities or large areas of land and space.
I read in a recent article that the total stock market capitalization of the top (1000?) US companies is approximately USD 16 trillion. I am not sure what total global market capitalization is, but USA's value is approximately equal to its GDP. Assuming that total business value is approximately equal to total GDP, we can estimate the value of the world's stock market capitalization as equal to world GDP, which I believe is somewhere around USD 55 trillion.
Can country and world market capitalization be used as an estimate for value of the country or planet? In the future could a price to GDP ratio be used to estimate value of a country or planet or other collection of matter?
Now I work in IT, so if there are any economists or financial experts out there, you can contribute to this discussion, and I will not mind at all if you correct me where I am wrong.
I have some other ideas for valuing countries, planets, and other large objects.
You could calculate the earning potential for every living thing that lives and will ever be born, and discount it at an appropriate rate. I believe this method could give wildly different values depending on your assumptions like population growth rates and income growth rates, and whatever value you get would be very high.
You could calculate the value of all land and natural resources. Natural resources exist elsewhere in the solar system besides Earth. Planets, moons, asteroids - they are all rich in natural resources.
A planet also would be valuable if it is capable of sustaining economically active life. This should also be taken into account, along with the duration for which the planet can sustain life. However in the future new technologies may arise that may increase the length of time the planet can sustain life.
What do you think? Do you have any other factors that need to be considered in valuing a country, planet, or solar system?
I had done some rough calculations for the value of the planet based on global income. Like I said, I got a big range of values based on my assumptions. You never know what disaster or miracle is going to happen in the future. Perhaps we should only forecast income for everyone who is alive today and discount it - then I get a value of approximately USD 1,500 trillion.
I hope these technical details did not bore you. In the future business and investment banking will operate on a much larger scale and be more interesting.
Sovereign solar systems could sell of asteroids or moons to foreign organizations to raise money due to a shortfall in revenue, due to a locally depressed economy.
What happens to the intelligent life on the planets or land which is sold? Are they going to stay, or be removed to another place? Will they be compensated from the sale price?
These are all interesting questions that could be answered. So far I have only barely touched the subject of investment banking, based on what I learnt in Mergers & Acquisitions (valuing businesses for merger or acquisition). I welcome more input from those who have actually worked in investment banking. As I understand it, business valuation is an art as much as a science - it is subjective.
Regards,
Abhinav Lal
How do you value entire continents or countries? How do you value entire planets or solar systems? How do you value entire Galaxies or universes? How would you value them now, and how will they be valued in the future? These are the kind of questions for which I am looking to answer. I studied business valuation using P/E rations and DCF during my MBA. But there was no methodology for valuing political entities or large areas of land and space.
I read in a recent article that the total stock market capitalization of the top (1000?) US companies is approximately USD 16 trillion. I am not sure what total global market capitalization is, but USA's value is approximately equal to its GDP. Assuming that total business value is approximately equal to total GDP, we can estimate the value of the world's stock market capitalization as equal to world GDP, which I believe is somewhere around USD 55 trillion.
Can country and world market capitalization be used as an estimate for value of the country or planet? In the future could a price to GDP ratio be used to estimate value of a country or planet or other collection of matter?
Now I work in IT, so if there are any economists or financial experts out there, you can contribute to this discussion, and I will not mind at all if you correct me where I am wrong.
I have some other ideas for valuing countries, planets, and other large objects.
You could calculate the earning potential for every living thing that lives and will ever be born, and discount it at an appropriate rate. I believe this method could give wildly different values depending on your assumptions like population growth rates and income growth rates, and whatever value you get would be very high.
You could calculate the value of all land and natural resources. Natural resources exist elsewhere in the solar system besides Earth. Planets, moons, asteroids - they are all rich in natural resources.
A planet also would be valuable if it is capable of sustaining economically active life. This should also be taken into account, along with the duration for which the planet can sustain life. However in the future new technologies may arise that may increase the length of time the planet can sustain life.
What do you think? Do you have any other factors that need to be considered in valuing a country, planet, or solar system?
I had done some rough calculations for the value of the planet based on global income. Like I said, I got a big range of values based on my assumptions. You never know what disaster or miracle is going to happen in the future. Perhaps we should only forecast income for everyone who is alive today and discount it - then I get a value of approximately USD 1,500 trillion.
I hope these technical details did not bore you. In the future business and investment banking will operate on a much larger scale and be more interesting.
Sovereign solar systems could sell of asteroids or moons to foreign organizations to raise money due to a shortfall in revenue, due to a locally depressed economy.
What happens to the intelligent life on the planets or land which is sold? Are they going to stay, or be removed to another place? Will they be compensated from the sale price?
These are all interesting questions that could be answered. So far I have only barely touched the subject of investment banking, based on what I learnt in Mergers & Acquisitions (valuing businesses for merger or acquisition). I welcome more input from those who have actually worked in investment banking. As I understand it, business valuation is an art as much as a science - it is subjective.
Regards,
Abhinav Lal