Price vs Value: le gap....

Why do companies trade at a premium compare to others?

It could be due to the difficulty of accessing to the shares, or it could be that fund managers somehow add value via stock selection and asset allocation skills. While this value addition can be attributed to management skills or growth opportunities, it can also be attributed to “options”.

All sectors have real options:
The "Old Economy" is undervalued because no one takes into account the kind of options that these companies have. But some "New Economy" companies are just pure options, and values obtained using real options are like DCF values - they depend on the assumptions made...