If it is hard to determine what stocks are worth, this WSJ article talks about the even harder problems of valuing securities where there is no market (i.e. no bids). http://online.wsj.com/article/heard_on_the_street.html
--------------------------------snip The oft-repeated problem is that the funds, and even some companies, can't get prices for many debt securities and derivatives with direct or indirect links to loans made to homeowners with spotty credit histories. Given that, they ask, how are they supposed to mark holdings to market when there is no market? .................... One answer is that everything has a price -- if it is low enough. That is tough for many managers to swallow if they think the long-term value of a holding isn't impaired. Trading at such a price is also a difficult prospect if a manager wants to avoid selling into a distressed market. The key point with BNP, for example, was the use of the word "fairly." But if there are no buyers to be found, there may be an even worse alternative. "Then the price is zero," says Jack Ciesielski, editor of the Analyst's Accounting Observer newsletter. "If there's a bid out there, then there's a price. Take your pick." Marking holdings to zero would be an extreme move. BNP's Mr. Papiasse says the problem was that there simply was no market or price for the assets. ........................... That logic is rarely cited when markets are soaring. Fund managers didn't complain that they were marking the value of their assets too high, Mr. Ciesielski, the newsletter editor, says. -raghu.
