A thing is only worth what someone is willing to pay for it. Valuation by formula is a pseudo science because every thing you do is ultimately subjective.
What someone is willing to pay for something is very arbitrary and will be influenced by such pseudo science valuation formulas if they set the price first. Price anchoring as a form of a self fulfilling prophecy.
Diamonds are worth a fraction of what Debeers wants for them, but people still pay it because those are the only prices they've ever seen. On the other hand, printers are worth far more than they sell for, yet nobody would consider paying the actual price for them.
It’s an educated guess, not the word of God. You don’t have to know it precisely to produce useful results. The entirety of physics is wrong, so what, it still allows us to build rockets, skyscrapers and computers.
