Whether you should or should not emphasize market value over intrinsic value depends on your position and the market cycle. As a seller in good times, the market value will usually be your best deal. The only exception to this is the really good agency. A market value may rarely adequately capture the true value of these agencies’ cash flows and risk. Internal perpetuation is almost always the best course for maximizing their value. If you are a buyer, a brutally honest intrinsic valuation is the best way to manage your risk. Market value should be entirely secondary.
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