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Cash is king. Interim metrics are a necessary evil.

I find the OPM method interesting. Has anyone here used this? Is it always more conservative? Is it a better predictor of realized value?

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OPM is terrible. Even the academics realize it (I think). This paper evaluates the analysis. There's a caveat on pg. 24. GIGO. In my opinion, it's not just a caveat. It's a killer. I'm not sure what the overarching societal value to applying OPM to private, illiquid company valuations could be.

http://repository.upenn.edu/cgi/viewcontent.cgi?article=1035...

It seems to require knowing the equity volatility and IPO price in advance. That is shaky.

But isn't it that it just needs to better than other methods?

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