Jeffrey Moore

Cash Is Not Yet King When it Comes to Market Performance

while google, microsoft, apple and the like do have a ton of money in their cash confers, they don't have a lot in relationship to their market cap...

goog trades at roughly 7x cash; where as DRAM trades at .75x cash and dcu trades at 1.25x cash. Neither of the companies have any debt to speak of.

It all goes back to intrinsic value of the business, and the relationship of cash to their market cap-with how easy it is to deploy that cash... obviously, it is easier for Google to deploy all their cash than for Berkshire to do so- the same way that a micro cap company could do so a lot more effectively than Google. However, to do so profitably, and at an acceptable rate of return can make things complicated. To compound at 20% is a lot easier with 10K than with 10 billion; that is what the companies you mention face.

thoughts?