Morgan Stanley is valued at 141.2 billion USD on capital markets currently.
According to my humble view and estimates, Morgan Stanley's intrinsic worth is 89 billion USD.
Since Morgan Stanley has staked its future on more than 50 % on wealth management, private banking in a sense, Morgan Stanley's franchise is heavily dependent on US and global stock markets.
Simply because wealthy individuals prefer to invest in publicly listed stocks, because they have more financial acumen and stocks can bring you 8 % - 11 % a year, measured by the leading US stock market indices on a historical basis for various historic periods.
In addition to that, Morgan Stanley receives much higher percentage of fee revenues as a percentage from its clients investing in equities, than its clients investing in bonds.
I personally believe the Standard and Poor's 500 Index can fall more than 30 % from its current level, while the Nasdaq Composite can fall 40 % from here. I have expressed this view numerous times on its blog.
That is why, I think Morgan Stanley's intrinsic worth is 89 billion USD, roughly 40 % less than its current market capitalisation.
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