Company valuation or market value has two parts: tangible value, like cash flow and earnings, and intangible value. Intangible value is based on the market's perception of whether a company is likely to keep its promises about future growth. Over the last 20 years, intangible value has grown as a percent of total market valuation. Even during the worst of the recession last year, companies with similar size and earnings had different market valuations. That's in part because investors have more confidence in the future of some companies than others.
