Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life. The calculation of intrinsic value, though, is not so simple. As our definition suggests, intrinsic value is an estimate rather than a precise figure, and it is additionally an estimate that must be changed if interest rates move or forecasts of future cash flows are revised.
In fact, using entirely reasonable assumptions, you can make the Dow's discounted market value almost anything you want it to be.
In a system where ninety percent or more of cases end in a negotiated disposition, it is unclear why the "discounted" punishment imposed in that ninety percent of cases should not rather be considered the norm. Where almost no one pays the "manufacturer's suggested retail price," and almost everyone buys the item at a "discounted" price, no one really gets a "bargain," and the product's real price is what is actually charged in the marketplace.
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