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opinion, at the time of her death decedent’s 195 shares of JFI
were worth $1,02911 per share, or a total of $200,655.
Court’s Analysis
We reject Mr. Keath’s method entirely, for two reasons.
First of all, Mr. Keath failed to consider earnings in his
estimate of the value of JFI, basing his entire estimate on the
assets of JFI. This, as we have already explained, was
inappropriate, and Mr. Keath’s failure to consider earnings value
at all undermines the reliability of his report.
Second, we think that the details of Mr. Keath’s analysis
show that, whether or not his method might reach an acceptable
result if properly applied, it was plainly misapplied in this
case. Mr. Keath’s method depends on the assumption that the
REIT’s he chose were a representative sample of all REIT’s; if
not, he could not claim that 95 percent of all REIT’s fell within
two standard deviations of the average. This is the fundamental
problem with Mr. Keath’s approach. We find it quite unlikely
that the REIT’s on Mr. Keath’s list fell into a standard
distribution.12 The range among the REIT’s he used varied
11 Mr. Keath presumably did some rounding to reach this
figure.
12 There is no evidence in the record telling us how the
REIT’s were chosen by Realty Stock Review magazine. The reason
Mr. Keath used this list was that it was the only list of REIT’s
he was aware of that included independently valued net asset
values. He admitted that his standard deviation analysis assumed
(continued...)
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