In other words, if the stock under study is selling at 50, how many points has the price been inflated by other investors' hopes? Probably there is no exact figure anyone could prove. But an approximation can be reached, and it is interesting to see how the assignment of weights and values can clarify thinking about worth. Price inflation can be gauged by the volume of activity in the stock, the rate of price rise, the extent of the news and gossip about the company in the financial and business press, the general popularity of the products in which it deals, or the industrial category in which it is grouped. There is, for instance, likely to be a good deal more inflation in an electronics stock these days than in Cream of Wheat. Perhaps you decide that 40 is a more realistic price, a more likely price if there were not so much excitement and energy behind the stock.

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