I think the key is not how much is Nintendo's appraisal value. The key should be how much the market think is Nintendo's value.

Generally speaking the market has a tendency to over react. I mean if something is good, the market usually over value it and if something is bad the market usually under value it.

Therefore, I think for a company like Nintendo(which is growing the future is looking good), if the fair value is say 80 per share, I believe it will be traded at much higher price than 80.

This is the psychology element which can not be quantified and is not considered in the appraisal value calculation. It is a human nature in all of us. If all the investors are computers or Robots, then yes I believe the traded price will be equal to its appraisal value which means once the price hits the result of a mathematical formula it will not move anymore.

For example, if Steve Jobs decides to leaves APPLE, although it probably doesn't effect the the appraisal value of apple(all of its existing products shouldn't be any different and besides Steve Jobs did not make those products himself), however the value of APPLE will definitely drop substantially.

You can quantify the psychology element by using forward P/E. Nintendo is trading with a P/E of 35, which is reasonable for a high growth stock for a company that carved its own market segment. If it starts trading with a P/E of, say, 100... things are irrational and it's probably time to get out.

The aforementioned P/E of 20 (or less) would be appropriate if earnings stopped growing.

for apple the p/e is... 47.11, forward p/e 30. wow.

well, if the market decides to give nintendo a forward p/e of 30, then... there's still like 50% to go. which is great!

like all of you said, there's still some way to go. but i'm looking at Starbucks, which has performed horribly the last year or so, and hope that for Nintendo, we don't get out too late when the time comes...

Only really stubborn or ignorant investors lose badly. With the way we study sales statistics here, I don't really see getting blindsided. We will see the weekly declines long before Wall Street does.

Why did you sell a week back or so FishyJoe?

Did you think that it had momentarily peaked right before earnings and was going to have a pullback?

Yup, too greedy! I didn't think it was peaking, but I did think the Yen was going to gain strength. I can predict Nintendo pretty well, it's the damn market I can't understand LOL!

NTDOY passed the 70. mark http://finance.google.com/finance?q=OTC:NTDOY

I am not talking about future earning or future potential. P/E usually reflect the discounted future cashflow of a company which is from its anticipated future growth. I am actually talking about the irrational part of investors. It can not be predicted but can be explained.

If something is good, that is worth say 100, people are willing to pay say 110 for it. There is no logical reason other than they just like it. And this irrationality is not static, it also changes over time as well.

I have seen many merger and acquisition in the industry that were made at much higher than market value. Why is that? It is because sometimes owner just won't sell. There are many reasons for that, some people just like the fact that own something. Some people just believe the companies worth a lot more than the market value and some people life at that time do not need large amount of cash, they need a business.

If Nintendo's market value is say 40 billion and Bill Gates decided to buy it, I bet he will spend a lot more than 40 billion.

Take Traveler$Aetna's Insurance(A subsidiary of Traveler's group which later on merge with Citibank), for example. I had that stock for many years and it was traded at $27 for many years(never moves!). Then one day, Traveler's group decided to buy back all the outstanding shares at something like $40 because it needs to reorganize and restructure. I sold immediately. Eventually, they did acquire all the outstanding shares and become 100% owner of the subsidiary. I always wonder, had I decided not to sell(Hey I just love this stock Okay!, I am irrational, OKay!), how much will they offer me to sell? Between 99.999% owner of a company and a 100% owner of the company the share value of that 0.0001% is much higher than its fair value.

My point is: the irrational part of investors is NORMAL. We should invest assuming all investors are normal however, the NORMAL includes irrational behavior which can not be quantified into a number ...maybe a very large range of numbers at best. The NORM is also changing.

it's great that we have such intelligent discussion boards!

Hot damn, it's at 69200 now!