The three different real powers
Lots of people talk about wealth, assets, and pricing, but discussing value is based on a completely different premise.
It is important to note that total return consists of net liquidation book value (NLV) and current year income. Since future income is uncertain, the assured NLV differs from fair market value (FMV) and the actual price.
1
Net Liquidation Value(NLV)
This is the most fundamental method for assessing a company’s value: the cash equivalent value of its net assets or the cost to recreate its value.
2
Net income multiples(P/E ratio)
Net income multiples, such as the P/E ratio, are commonly used to assess a company’s valuation relative to its earnings. The modern approach to asset valuation heavily relies on future income, using discounted cash flow (DCF) based on net income after depreciation, amortization, and taxes. EV/EBITDA is also widely applied in the private market.
3
Fair Market Value(FMV)
It is based on the supply and demand of trading assets and is not strictly tied to net liquidation value (NLV) or earnings power.
The drivers
1
Customer&Employee loyalty
Recurring Revenue & High Margins.
A strong customer attachment with repeat purchases or subscriptions ensures predictable revenue streams. Customer acquisition is expensive, so retaining users increases profitability.
Subscription models (e.g., SaaS, memberships, premium services)
Strong brand affinity (Apple, Tesla, and luxury brands thrive on this)
Customer incentives (loyalty programs, exclusive access, community engagement)
2
Digitalized value chain
efficiency, scalability, and monetization
Intangibles, brands, supply chain, distribution, onboarding&education , opensource ecosystem, data-driven decision
Standardize intangibles and make them tradable.
3
LPs attraction
Ownership vs profit sharing
Other’s capital