Three Important Valuation Lessons — From a Diner in Queens
Cash is king, and time value of money is key
Taste of the Town Diner is located in New York City, in the southeastern section of the borough of Queens, in the Richmond Hill area. You wouldn’t know it by that name unless you searched for “restaurants” or “diners” while in Richmond Hill, through Google Maps. It doesn’t have a website. A bright yellow neon sign on the window simply says DINER. It’s located at the corner of Jamaica Avenue and 121st Street, next to the 121st subway station that serves the J and Z lines. It’s not exactly in a thriving neighborhood. Many nearby shops have shut down. But there are some open stores nearby including a taxi service, a barber shop, a shoe and watch repair shop, and a place that does income tax returns. And yet if you go beyond the surface, Taste of the Town Diner is a microcosm of free markets and capitalism. Understanding what has made this modest sole-proprietor diner thrive for the past 37 years, an oasis in a business desert, can help you understand what makes some publicly traded stocks worth more than others. It all boils down to three simple valuation lessons.
