PARADOXES IN VALUATION

Florin Turcas

The Valuation Journal, 2019, vol. 14, issue 1, 5-29

Abstract: My scope of interest focuses on the valuation techniques, the analysis of the capital market and portfolio theories. Having acquired some experience therein, I noticed a number of inconsistencies, paradoxes or rather contradictory theories, which I will outline in this paper. The article is a review of the main theories which are peculiar to each of the three financial sciences (the theories of value, of the financial markets and of portfolio) in which I pointed out a series of intrinsic contradictions and highlighted the frailness of their interdisciplinary connections. Each of the fields resorts to specific methods, approaches and techniques, a beneficial aspect that enhances the diversity of investment strategies. I have however noticed that these three fields introduce theories that are so different, even divergent at times, that we may wonder whether they should not be correlated nonetheless, both from the perspective of the individual investor and, especially, the perspective of institutional (qualified) investors. The conclusions rather speak of personal views, as the author believes that dwelling on such issues may contribute to a better integration of the valuation approaches in the context of capital market investments.

JEL-codes: G11 G12 G15 G24 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:vaj:journl:v:14:y:2019:i:1:p:5-29

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