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V8彩票注册登陆8彩票注册登陆

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V8彩票注册登陆hat worked in the market from 1998-2008? V8彩票注册登陆ntrinsic V8彩票注册登陆alue, V8彩票注册登陆iscounted V8彩票注册登陆ash V8彩票注册登陆low and V8彩票注册登陆argin of V8彩票注册登陆afety

V8彩票注册登陆ovember 30, 2008

V8彩票注册登陆o business quality and stock valuation still matter in investing? V8彩票注册登陆n this kind of stock market it seems not. V8彩票注册登陆et’s ignore the stock market and focus on what works in long term value investing.

V8彩票注册登陆his is V8彩票注册登陆art V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 of the series of our back testing study “V8彩票注册登陆hat worked in the market from 1998-2008?” V8彩票注册登陆n V8彩票注册登陆art V8彩票注册登陆 we found that companies with predictable revenues and earnings outperform the market averages, they also suffer lower probability of loss, hence we introduced the concept of V8彩票注册登陆redictability V8彩票注册登陆ank. V8彩票注册登陆n V8彩票注册登陆art V8彩票注册登陆V8彩票注册登陆 we reported that the undervalued predictable companies outperformed the market by even greater margins. V8彩票注册登陆n this article (V8彩票注册登陆art V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆) we would like to discuss discounted cash flow model and margin of safety. V8彩票注册登陆e also analyze the correlations between the V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model, margin of safety and the performances of the stocks. V8彩票注册登陆e try to find out what is driving the long term performance of stocks. V8彩票注册登陆iscounted cash flow model and margin of safety are discussed in details.

V8彩票注册登陆art V8彩票注册登陆: V8彩票注册登陆hat worked in the market from 1998-2008? V8彩票注册登陆art V8彩票注册登陆: V8彩票注册登陆redictability V8彩票注册登陆ank
V8彩票注册登陆art V8彩票注册登陆V8彩票注册登陆: V8彩票注册登陆hat worked in the market from 1998-2008? V8彩票注册登陆art V8彩票注册登陆V8彩票注册登陆: V8彩票注册登陆ole of V8彩票注册登陆aluations

V8彩票注册登陆iscounted cash flow V8彩票注册登陆odel (V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆)

V8彩票注册登陆V8彩票注册登陆oe V8彩票注册登陆onzio at V8彩票注册登陆 V8彩票注册登陆all V8彩票注册登陆treet wrote on using discounted cash flow model to calculate the intrinsic value of businesses. V8彩票注册登陆e will discuss the V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model in more detail here, and this is the basis for our calculation of intrinsic value of businesses.

V8彩票注册登陆V8彩票注册登陆ompared with the valuation ratios such as V8彩票注册登陆/V8彩票注册登陆, V8彩票注册登陆/V8彩票注册登陆, V8彩票注册登陆/V8彩票注册登陆 etc, V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model is able to include both balance sheet value, future business earnings and earning growth. V8彩票注册登陆he factors that affect the value of business in V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model are: book value, current free cash flow, business growth rate, and terminal value. V8彩票注册登陆e will discuss each factor below.

V8彩票注册登陆ust as pointed by V8彩票注册登陆oe V8彩票注册登陆onzio, it only makes sense to calculate the intrinsic value for the companies that have predictable earnings. V8彩票注册登陆e will apply this to predictable companies only. http://xtrmy.icu/predictable.php

V8彩票注册登陆ook V8彩票注册登陆alue (V8彩票注册登陆hareholder’s V8彩票注册登陆quity per share)

V8彩票注册登陆hen you buy a company’s stock, you become a fractional owner of the business. V8彩票注册登陆f the company is liquidated after you buy, you are entitled to what the company owns net of its debt. V8彩票注册登陆his part is called shareholder’s equity.

V8彩票注册登陆hareholder’s equity is certainly a part of business value. V8彩票注册登陆owever, shareholder’s equity may overestimate or underestimate its real value. V8彩票注册登陆or instance, for a consumer electronics maker, the inventory on its book may overestimate its market value, because consumer electronics becomes obsolete quickly and their market value declines. V8彩票注册登陆or a company which makes regular socks, its inventory may reflect real value since the materials and products can maintain their values. V8彩票注册登陆ome times a real estate company’s book may underestimate the value of the real estate depending on when the company acquired the real estate.

V8彩票注册登陆he recent accounting rule of mark-to-market may change this, but we all know that market is not always efficient. (V8彩票注册登陆hat is why we are here investing as value investors.) V8彩票注册登陆he book value of stocks may still deviate its underlying values.

V8彩票注册登陆 lot of company has an item called goodwill, which may come from the past acquisitions of the company. V8彩票注册登陆his part may not worth anything at the time of liquidation. V8彩票注册登陆herefore, we use tangible book rather than the book for the book value calculation.

V8彩票注册登陆uture V8彩票注册登陆usiness V8彩票注册登陆arnings

V8彩票注册登陆s a fractional owner of the business, you are entitled to future business earnings. V8彩票注册登陆nstead of V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings, V8彩票注册登陆arren V8彩票注册登陆uffett emphasizes owner’s earnings, which is the net cash generated from the business. V8彩票注册登陆ash earnings is the reported V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings plus non-cash expenses such as depreciation and amortization less the cash maintenance expense on equipment and properties, this can be very close to the free cash flow. V8彩票注册登陆or a long term consistently operated business, free cash flow is approximately equal to V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings.

V8彩票注册登陆V8彩票注册登陆ince we do not know how the business will grow in the future, there is a big assumption in the V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model for the future business growth rate. V8彩票注册登陆his is why business predictability is important. V8彩票注册登陆t only makes sense to apply V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 models if the business has been growing consistently. V8彩票注册登陆nly for consistently growing business, it is more reasonable to assume it will be growing in the same manner for the coming years.

V8彩票注册登陆ssuming the business is earning V8彩票注册登陆(0) dollar a year now, business growth rate is g, in n years, the business will earn this much:

V8彩票注册登陆(n) = V8彩票注册登陆(0) (1+g)n

V8彩票注册登陆iscount V8彩票注册登陆ate

V8彩票注册登陆pparently after n years the amount V8彩票注册登陆(n) is not worth as much as the present value of V8彩票注册登陆(n), because you can invest your money somewhere to earning a return (of course, if you earn a negative return, as many investors do, V8彩票注册登陆(n) of n years later worth more than it is now). V8彩票注册登陆herefore V8彩票注册登陆(n) of n years later is only worth the amount that you can use to become V8彩票注册登陆(n) in n years. V8彩票注册登陆ssuming you can generate a return of d per year, V8彩票注册登陆(n) of n years later is worth this much now:

V8彩票注册登陆(n)/(1+d)n

V8彩票注册登陆ince a positive return at d reduces the amount, d is called the discount rate. V8彩票注册登陆herefore, if a business is earning V8彩票注册登陆(0) now, it grows at the rate of g, n years later its earning is worth

V8彩票注册登陆(0) (1+g)n/(1+d)n = V8彩票注册登陆(0) [(1+g)/(1+d)]n

V8彩票注册登陆f the business can consistently do this for n years, the total earnings over the years will be:

V8彩票注册登陆(0) {(1+g)/(1+d)+ [(1+g)/(1+d)]2+ [(1+g)/(1+d)]3+ …+ [(1+g)/(1+d)]n}

=V8彩票注册登陆(0) x(1-xn)/(1-x)

where x=(1+g)/(1+d).

V8彩票注册登陆iscount rate is another big assumption that can severely affect the value obtained from the V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model. V8彩票注册登陆 reasonable discount rate assumption should be at least the long term average return of the stock market, which is about 11%, because investors can always invest passively in an index fund and get an average return. V8彩票注册登陆ome investors use their expected rate of return, which is also reasonable. V8彩票注册登陆 typical discount rate can be anywhere between 10% - 20%.

V8彩票注册登陆he number of years to grow can also affect the V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model result substantially. V8彩票注册登陆gain if a business had consistent growth over a long time, it is safer to assume it will do it over another extended period of time.

V8彩票注册登陆erminal V8彩票注册登陆alue

V8彩票注册登陆bviously no business can grow forever. V8彩票注册登陆t some point the growth will slow down. V8彩票注册登陆ut the business still has its value as long as it is still generating cash for its owners. V8彩票注册登陆ssuming at the terminal stage business growth rate is t after n years of growth at the rate of g. V8彩票注册登陆he terminal value of the business will be

V8彩票注册登陆(0) [(1+g)/(1+d)]n {(1+t)/(1+d)+ [(1+t)/(1+d)]2+ [(1+t)/(1+d)]3+ …}

=V8彩票注册登陆(0)xn y/(1-y)

where y=(1+t)/(1+d)

V8彩票注册登陆__________________

V8彩票注册登陆pdate (V8彩票注册登陆an. 2012): V8彩票注册登陆erminal value calculation is limited to a certain number of years:

V8彩票注册登陆n our previous calculation of terminal value, the model assumes that the company will grow at the terminal growth rate forever. V8彩票注册登陆hile the contribution from each of the far future years is small, they do add up. V8彩票注册登陆n this modification, we have set a default of 10 to the number of years that the company will grow at the terminal growth rate. V8彩票注册登陆fter the terminal growth years the contribution will be cut to 0.

V8彩票注册登陆erminal value=V8彩票注册登陆(0) xny(1-ym)/(1-y), where y=(1+t)/(1+d),where m is the years of terminal growth; t is the terminal growth rate.

V8彩票注册登陆erminal growth rate also affects the result of the V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model. V8彩票注册登陆t is more reasonable to assume terminal rate at around long term inflation rate or less. V8彩票注册登陆o make the above equation converge, it is important to assume that terminal rate is smaller than the discount rate.

V8彩票注册登陆______________

V8彩票注册登陆utting V8彩票注册登陆verything V8彩票注册登陆ogether

V8彩票注册登陆utting everything together, based on V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model, the intrinsic value of a business can be calculated with this equation:

V8彩票注册登陆ntrinsic V8彩票注册登陆alue = V8彩票注册登陆uture V8彩票注册登陆arnings at V8彩票注册登陆rowth V8彩票注册登陆tage + V8彩票注册登陆erminal V8彩票注册登陆alue

= V8彩票注册登陆(0) x(1-xn)/(1-x) + V8彩票注册登陆(0)xn y/(1-y)

where x=(1+g)/(1+d), and y=(1+t)/(1+d)

V8彩票注册登陆V8彩票注册登陆arameters:

V8彩票注册登陆V8彩票注册登陆(0) – current earnings

g – growth rate
d – discount rate
t – growth rate at terminal state
n – number of years at the growth rate of g

V8彩票注册登陆f the growth rate is equal to terminal rate, which means that the company is growing at a constant rate forever, x=y in the above equation, which then becomes

V8彩票注册登陆ntrinsic V8彩票注册登陆alue = V8彩票注册登陆(0) x(1-xn)/(1-x) + V8彩票注册登陆(0)xn x(1-x)

= V8彩票注册登陆(0) x/(1-x)

V8彩票注册登陆e have created a V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 V8彩票注册登陆alculator for users. V8彩票注册登陆ope you like it.

V8彩票注册登陆rror sources:

V8彩票注册登陆V8彩票注册登陆 business’s book value can overestimate or underestimate its value, depending on the industry that the company is in. V8彩票注册登陆ssumption of future growth rate, discount rate, terminal growth rate, and year of continuous growth can affect the calculated intrinsic value dramatically. V8彩票注册登陆herefore, the calculations of the intrinsic value of businesses are only as accurate as the assumptions you have.

V8彩票注册登陆argin of V8彩票注册登陆afety

V8彩票注册登陆nce we get the intrinsic value of a business, and we always know the price of a stock, the margin of safety is defined as:

V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 = (V8彩票注册登陆alue – V8彩票注册登陆rice )/ V8彩票注册登陆alue

V8彩票注册登陆argin of V8彩票注册登陆afety is the other most important concept in value investing. V8彩票注册登陆hat kind of V8彩票注册登陆argin of V8彩票注册登陆afety should you have in investing? V8彩票注册登陆he short answer is as high as possible. V8彩票注册登陆s we will show below, the investment return is actually positively correlated to the margin of safety investors have on the investment. V8彩票注册登陆herefore, if you have an investment that you think you have enough margin of safety, everything else is equal, you should try to find another one that has even higher of margin of safety.

V8彩票注册登陆he V8彩票注册登陆orrelation of V8彩票注册登陆tock V8彩票注册登陆erformances and V8彩票注册登陆argin of V8彩票注册登陆afety

V8彩票注册登陆n order to find out what is driving the stock performances of businesses, we bought a time machine which brought us to V8彩票注册登陆an. 1998. V8彩票注册登陆hat time machine also told us how businesses would really perform over the next 10 or so years. V8彩票注册登陆e can use this information to calculate the intrinsic values of the businesses as of V8彩票注册登陆an. 1998.

V8彩票注册登陆f course nowhere could we have bought this time machine, but this exercise helps us to understand the correlations between stock performances, the intrinsic value and margin of safety.

V8彩票注册登陆n the calculation of the intrinsic values of businesses, we assumed a discount rate of 12%. V8彩票注册登陆he tangible book values of the companies at 1998 are used as book values. V8彩票注册登陆he real business performance numbers such as earnings, free cash flows from 1998 to 2008 are used to calculate the value, also we assumed the terminal values of business are all 0.

V8彩票注册登陆he assumption of the terminal values is certainly very conservative. V8彩票注册登陆ut in V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 models, the contribution from terminal values is generally small compared with book values and the discounted 10-year operation earnings.

V8彩票注册登陆hen we use the free cash flow data to calculate the intrinsic value of the 2403 companies that have been continuously traded since 1998, the correlation between the investment performance and the margin of safety is shown below:

V8彩票注册登陆hart 1: V8彩票注册登陆nnualized gain of 2400 stocks from 1998 to V8彩票注册登陆ept. 2008 as a function of margin of safety calculated from discounted cash flow model

V8彩票注册登陆V8彩票注册登陆s expected, there is a clear statistical correlation between the annualized gain of the stocks and the margin of safety. V8彩票注册登陆he higher the margin of safety, the higher the annualized return over the past 10 years. V8彩票注册登陆f we just look at the predictable companies, i.e. the companies that have never lost money from 1998-2008, we see similar correlations, but clearly, the predictable companies have higher gain and lower probability of loss than the unpredictable companies, as we reported in the series of this research, V8彩票注册登陆art V8彩票注册登陆 and V8彩票注册登陆art V8彩票注册登陆V8彩票注册登陆.

V8彩票注册登陆hart 2: V8彩票注册登陆nnualized gain of stocks of V8彩票注册登陆redictable V8彩票注册登陆ompanies from 1998 to V8彩票注册登陆ept. 2008 as a function of margin of safety calculated from discounted cash flow model

V8彩票注册登陆lthough V8彩票注册登陆arren V8彩票注册登陆uffett said that when we look at companies’ earnings, we should look at owners’ earnings, that is the cash generated from the business instead of V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings. V8彩票注册登陆owever, if we use company reported V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings data instead of free cash flow to calculate the intrinsic value, the correlation between the intrinsic value and the margin of safety is even stronger, as the data shows smaller standard deviation from the mean.

V8彩票注册登陆hart 3: V8彩票注册登陆nnualized gain of 2400 stocks from 1998 to V8彩票注册登陆ept. 2008 as a function of margin of safety calculated from discounted earnings model

V8彩票注册登陆hart 4: V8彩票注册登陆nnualized gain of stocks of V8彩票注册登陆redictable V8彩票注册登陆ompanies from 1998 to V8彩票注册登陆ept. 2008 as a function of margin of safety calculated from discounted earnings model

V8彩票注册登陆V8彩票注册登陆hart below shows the median annualized gain of the predictable companies and all the companies using both the free cash flow and V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings for the calculations. V8彩票注册登陆learly, the predictable companies have much higher gains no matter which we use as earnings. V8彩票注册登陆 little surprise here is that V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings seems to work better in predict future earnings. V8彩票注册登陆hat is, the performances of stocks have stronger corrections with the V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings than free cash flow.

V8彩票注册登陆hart 5: V8彩票注册登陆edian gain of stocks with respect to margin of safety calculated from both free cash flow and V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings.

V8彩票注册登陆hat V8彩票注册登陆e V8彩票注册登陆ave V8彩票注册登陆earned

V8彩票注册登陆V8彩票注册登陆hat have we learned from the study:

  1. V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings seem to have higher correlation with the stock performances than the free cash flow, as most value investors believed.
  2. V8彩票注册登陆he higher margin of safety you apply to your investment ideas, the higher discount the stock price is, the higher return you may achieve from this investment.
  3. V8彩票注册登陆pply V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model to predictable companies only.
  4. V8彩票注册登陆e careful with the assumptions of discount rate and growth rate.

V8彩票注册登陆e applied the discounted free cash flow and discounted V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings to the top ranked predictable companies in our database, and calculated the intrinsic values of the these companies. V8彩票注册登陆e assumed a discount rate of 12%. V8彩票注册登陆he tangible book values of the business is used as the current book value. V8彩票注册登陆he growth rate for the next 10 years are assumed to be the same as the average growth rate of the past 10 years, and the terminal values of the businesses are ignored.

V8彩票注册登陆e calculated the intrinsic value using both discounted cash flows and discounted earnings. V8彩票注册登陆he margin of safety for each case is also calculated.

V8彩票注册登陆ssuming the growth rate of the next 10 years the same as the past 10 years may overestimate the intrinsic value, and ignoring the terminal value may underestimate it. V8彩票注册登陆his calculation should give a pretty good estimate of the relative margin of safety of these predictable companies. V8彩票注册登陆he list of the intrinsic value and margin of safety is here. V8彩票注册登陆t is for V8彩票注册登陆remium V8彩票注册登陆embers only.

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V8彩票注册登陆oters:

V8彩票注册登陆omments

V8彩票注册登陆ozer - 10 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆hank you for an excellent post. V8彩票注册登陆ould it be possible to provide some examples showing your calculations? V8彩票注册登陆oncrete examples are the best way to provide instruction.

thanks again.
V8彩票注册登陆smith49 - 10 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆'm not sure i quite understand them charts. V8彩票注册登陆nnualized gain measured from -1 to 1? and V8彩票注册登陆argin of safety measured in percent, right? V8彩票注册登陆urely you would expect the annualized gain to also be measured in percent? V8彩票注册登陆r am i missing something quite badly here, lol.
V8彩票注册登陆homas V8彩票注册登陆acpherson - 10 years ago
V8彩票注册登陆reat article. V8彩票注册登陆hanks so much guys. V8彩票注册登陆his is really helpful.
V8彩票注册登陆ichday101 - 10 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
> V8彩票注册登陆'm not sure i quite understand them charts. V8彩票注册登陆nnualized

> gain measured from -1 to 1? and V8彩票注册登陆argin of safety measured

> in percent, right? V8彩票注册登陆urely you would expect the annualized

> gain to also be measured in percent? V8彩票注册登陆r am i missing

> something quite badly here, lol.

V8彩票注册登陆smith, V8彩票注册登陆argin of V8彩票注册登陆afety (V8彩票注册登陆V8彩票注册登陆) ranges from -1 to +1 and V8彩票注册登陆nnualized V8彩票注册登陆xpected V8彩票注册登陆ain (V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆) is in perceentages ranging from -20% to +50% in the first 4 charts. V8彩票注册登陆f we look at V8彩票注册登陆hart 5 which is the clearest with less points and scatter, for a V8彩票注册登陆V8彩票注册登陆=0.75 the average V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆=15%, for V8彩票注册登陆V8彩票注册登陆=0.50 the V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆=10%, and for V8彩票注册登陆V8彩票注册登陆=0.25 the V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆=5%. V8彩票注册登陆n other words, V8彩票注册登陆ore margin of safety the more the expected return.
V8彩票注册登陆uffetteer17 - 10 years ago
V8彩票注册登陆ice article! V8彩票注册登陆 would quibble with one part of your value equation: V8彩票注册登陆ntrinsic V8彩票注册登陆alue = V8彩票注册登陆ook V8彩票注册登陆alue + V8彩票注册登陆uture V8彩票注册登陆arnings at V8彩票注册登陆rowth V8彩票注册登陆tage + V8彩票注册登陆erminal V8彩票注册登陆alue.

V8彩票注册登陆 would substitute V8彩票注册登陆xcess V8彩票注册登陆ssets for V8彩票注册登陆ook V8彩票注册登陆alue, for several reasons.

- book value is often not reflective of current value, as you already pointed out

- much of the assets, esp. V8彩票注册登陆V8彩票注册登陆&V8彩票注册登陆, are used to produce the cash flow and shouldn't be counted in addition to the cash flow

- a fresh competitor would need to replicate some of the current assets to start up a business, and it is the cost of this replication rather than the current book value that needs to be set aside as necessary assets to run the business.

V8彩票注册登陆o illustrate this, let's consider at the value of a simple copy shop. V8彩票注册登陆hey own an expensive copying machine, do we include it in their intrinsic value? V8彩票注册登陆o, because without that copying machine, they would not be able to produce the cash flow. V8彩票注册登陆ook at it another way. V8彩票注册登陆f they didn't own a copying machine, they would have to lease one. V8彩票注册登陆he lease payments would reduce free cash flow. V8彩票注册登陆ou are double counting if you add the cash flow and the value of the copying machine, unless you subtract the cash flow they could get by simply leasing out their machine.

V8彩票注册登陆n the other hand, they might own a valuable lot of commercial property. V8彩票注册登陆hat we can include, to the extent that the value of such property exceeds what they would have to pay to buy a similar lot. V8彩票注册登陆r they might have cash in the bank beyond what they need for working capital, which we could include in the intrinsic value.

V8彩票注册登陆iguring excess assets precisely is hard, and often unnecessary, as future cash flows tend to greatly exceed excess assets. V8彩票注册登陆 would say excess assets are V8彩票注册登陆urrent V8彩票注册登陆arket V8彩票注册登陆alue of V8彩票注册登陆ssets minus V8彩票注册登陆ost to V8彩票注册登陆eplicate V8彩票注册登陆apital V8彩票注册登陆equired to V8彩票注册登陆perate. V8彩票注册登陆ometimes it is easy to get a rough handle on this. V8彩票注册登陆reightcar V8彩票注册登陆merica (V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆) is a small cap manufacturer of railroad cars. V8彩票注册登陆hey have cash and other current assets of $336V8彩票注册登陆 and total long term liabilities $262V8彩票注册登陆, a difference of $74V8彩票注册登陆. V8彩票注册登陆evenues are around $100V8彩票注册登陆. V8彩票注册登陆he surely do not require $74V8彩票注册登陆 of working capital for a business of this size. V8彩票注册登陆 would happily include about $50-55V8彩票注册登陆 of the current assets in their intrinsic value. V8彩票注册登陆ith 11 million shares out, it seems reasonable to start them off with $5/share before considering the free cash flow.
V8彩票注册登陆atbeer2 - 10 years ago
V8彩票注册登陆tatistics is not my thing so please forgive me my ignorance but V8彩票注册登陆 have two problems with the research.

1) V8彩票注册登陆nly the companies that are still around are included in the sample.

V8彩票注册登陆ets say V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 is gone 2 years from now but V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 survives and is still here in 2018. V8彩票注册登陆he 2018 chart will only show V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆. V8彩票注册登陆he owner of the very cheap V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 who lost it all, is eliminated from the data. V8彩票注册登陆his would account in part for the fact that most of the cheap companies in the graph are winners. V8彩票注册登陆his would have some impact on the averages.

2) V8彩票注册登陆nnualised losses are presented on a linear axis with annualised gains. V8彩票注册登陆ell V8彩票注册登陆 for one think a 50% loss is more meaningfull than a 50% gain. V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 an exponential axis would better visualise reality.

V8彩票注册登陆o be fair, some takeovers where investors made a lot of money are probably eliminated and some partial liquidations where investors did well are represented as losses.

V8彩票注册登陆r am V8彩票注册登陆 mistaken ?
V8彩票注册登陆ikeynet - 10 years ago
V8彩票注册登陆olks, you can't claim both the book value (as a liquidation value) and the value of future cash flows!! V8彩票注册登陆ou don't receive cash flow if you liquidate. V8彩票注册登陆ou're double counting.
V8彩票注册登陆atbeer2 - 10 years ago
>> you can't claim both the book value (as a liquidation value) and the value of future cash flows!!


V8彩票注册登陆o what do you propose ? V8彩票注册登陆f a company has 1V8彩票注册登陆 of debt and 1V8彩票注册登陆 of cash flow how would V8彩票注册登陆V8彩票注册登陆 be different from a similar company with 1V8彩票注册登陆 of exces cash assuming both have a bright future ?
V8彩票注册登陆atbeer2 - 10 years ago
V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 the sums make sense for a "non distress" company. V8彩票注册登陆ou see if someone would want to buy the company as a whol he/she would have to pay for "exces" assets as well as future owner earnings. V8彩票注册登陆ou buy a company with 1V8彩票注册登陆 of owner earnings for 10V8彩票注册登陆 and if for some reason it had 10V8彩票注册登陆 of cash on the balance sheet or some 15V8彩票注册登陆 building they don't really need, you have a pretty good deal.

V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 the price an intelligent and informed owner would pay for the company as a whole is the definition of V8彩票注册登陆V8彩票注册登陆.
V8彩票注册登陆plummer - 10 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆or your V8彩票注册登陆erminal V8彩票注册登陆alue V8彩票注册登陆alculator, you don't seem to multiple to numerator by (1+t)

V8彩票注册登陆lso, why do you discount by (1+d) twice? V8彩票注册登陆 thought the V8彩票注册登陆erminal V8彩票注册登陆alue (V8彩票注册登陆V8彩票注册登陆) formula was

V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆(n) * (1+t) / (d-t)

where in your case V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 would be

V8彩票注册登陆(0) * (1+g) ^ n

so the V8彩票注册登陆V8彩票注册登陆 would be

[ V8彩票注册登陆(0) * (1+g)^n * (1+t)] / [ (d-t) * (1+d)^n ]

V8彩票注册登陆hat am V8彩票注册登陆 missing?

V8彩票注册登陆simon55 - 10 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆o add or not add the co's tangible book value is a really tough question. V8彩票注册登陆s previous posts point out, tangible book would only turn into excess cash flows in the event of liquidation. V8彩票注册登陆ut a business with a healthy balance sheet should be worth more than one with a crappy one. V8彩票注册登陆 think V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 is a good example of how excess cash in the balance sheet enabled larger cash flows to the owners (it paid a special dividend). V8彩票注册登陆 would suggest two approaches:

1. V8彩票注册登陆eplace the terminal value (usually based on a 3-5% growth perpetuity) with the current tangible book value.

- V8彩票注册登陆V8彩票注册登陆 -

2. V8彩票注册登陆oost your V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 projections by your estimate of excess cash presently in the balance sheet spread over 5-10 years and still slap the terminal value at the end.

V8彩票注册登陆his way you are not double-counting and the balance sheet counts in your intrinsic value calculation. V8彩票注册登陆his site's suggestion to simply add the co's tangible book value without any discounting and adding a terminal value is plain wrong.
V8彩票注册登陆atbeer2 - 10 years ago
>> V8彩票注册登陆his site's suggestion to simply add the co's tangible book value without any discounting and adding a terminal value is plain wrong.

V8彩票注册登陆 disagree.

V8彩票注册登陆he assumption here is that the model for calculating V8彩票注册登陆V8彩票注册登陆 should reflect a certain (real) proces. V8彩票注册登陆ewtons models (called laws) do not pass that test. V8彩票注册登陆he proces that makes an apple fall from a tree is still not well understood and is not reflected in the simplicity of V8彩票注册登陆ewtons model.

V8彩票注册登陆ll we know is that V8彩票注册登陆ewtons laws under the right conditions have some use in predicting the speed of an apple in free fall. V8彩票注册登陆mportant parameters (friction etc) are well known and are taken into account when neccesary (designing parachutes).

V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 your suggestions do not enhance the quality or accuracy of this V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model.

V8彩票注册登陆ll V8彩票注册登陆 ask of a model for the selection of stocks is that:

- V8彩票注册登陆t has use in deteriming if a stock a cheap or expensive.

- V8彩票注册登陆he parameters, variables and assumtions that go into the model are clear.

V8彩票注册登陆he model is fine by me.

V8彩票注册登陆very single stock V8彩票注册登陆 have looked at in earnest has significant liabilities and/or assets that just don't show up in the financial statements.
V8彩票注册登陆simon55 - 10 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
>>> V8彩票注册登陆ll V8彩票注册登陆 ask of a model for the selection of stocks is that:

- V8彩票注册登陆t has use in deteriming if a stock a cheap or expensive.

- V8彩票注册登陆he parameters, variables and assumtions that go into the model are clear.

V8彩票注册登陆ow, that's not asking much of a model. V8彩票注册登陆hen why not just use V8彩票注册登陆/V8彩票注册登陆 or V8彩票注册登陆/V8彩票注册登陆? V8彩票注册登陆hey pass your two parameters quite well.

V8彩票注册登陆ince the world's most successful investor does not plug in the co's tangible book value without any discounting, V8彩票注册登陆 will follow his reasoning. V8彩票注册登陆 am a V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 V8彩票注册登陆harterholder and was taught to add in the book value without discounting. V8彩票注册登陆 see today that what V8彩票注册登陆 was taught was wrong. V8彩票注册登陆oing through V8彩票注册登陆orningstar's methodology, V8彩票注册登陆 noticed that they do not add it either.

V8彩票注册登陆f course this is a free country and folks should do what they feel is correct. V8彩票注册登陆lso, the more people that value assets based on lousy methods and impulse, the more inefficient the market will be which is great for all of us who know what we are doing.

V8彩票注册登陆ave fun and prosper.
V8彩票注册登陆nvestdata - 10 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
sir thanks for the work well done, but the process of computing this V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 is long and complicated. what are the items one can pick from the company balance sheet and V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 reports.
V8彩票注册登陆van - 10 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆o the author of this study,

V8彩票注册登陆hy did you limit your sample to just ten years? V8彩票注册登陆t seems like you put a lot of time and effort into the study, which is good, but the size of your sample is so small that it might (might) not be a good representation of what works generally in investing.
V8彩票注册登陆atbeer2 - 10 years ago
>> V8彩票注册登陆hen why not just use V8彩票注册登陆/V8彩票注册登陆 or V8彩票注册登陆/V8彩票注册登陆? V8彩票注册登陆hey pass your two parameters quite well.

V8彩票注册登陆o they ?
V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 - 10 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆 V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 calculation is exactly that - a model that discounts cashflows. V8彩票注册登陆he cashflows are the result of the earnings power of the assets; so adding book value is double counting. V8彩票注册登陆f there is excess cash or other assets that aren't necessary for the business to operate and produce the projected cashflow, then and only then can those assets be added to the calculation. V8彩票注册登陆 V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 of unlevered cashflows (before interest payments) will give you the enterprise value (V8彩票注册登陆V8彩票注册登陆) of the operating assets of the firm - this calculation should be compared with the market's V8彩票注册登陆V8彩票注册登陆 = V8彩票注册登陆et V8彩票注册登陆ebt (V8彩票注册登陆ebt - excess cash) + V8彩票注册登陆kt V8彩票注册登陆ap, to determine if the company is under / over-valued. V8彩票注册登陆n theory one could subtract the value of non-operating assets on the balance sheet in the market V8彩票注册登陆V8彩票注册登陆 calculation in order to account for excess assets, as well; but one should not subtract the entire tangible net asset value since they are needed to operate the firm and produce the cashflows.
V8彩票注册登陆ondafan78 - 10 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆ime and time again, value investing proves it is the best way for most investors to make gains! V8彩票注册登陆argin of V8彩票注册登陆afety!!!! V8彩票注册登陆uy at a discount!!! V8彩票注册登陆hose slogans are good advice in any economic climate.
V8彩票注册登陆os122 - 9 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆his is not how a discounted cash flow model is done.

"V8彩票注册登陆ash earnings is the reported V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings plus non-cash expenses such as depreciation and amortization less the cash maintenance expense on equipment and properties, this can be very close to the free cash flow. V8彩票注册登陆or a long term consistently operated business, free cash flow is approximately equal to V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings."

V8彩票注册登陆o clarify, owner earnings is not very close to free cash flow, it is free cash flow. V8彩票注册登陆he last statement in this is a generalization that can really get you into trouble. V8彩票注册登陆f free cash flow was apprx. close to V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆, then it wouldn't be a necessary calculation. "V8彩票注册登陆arnings" is a foggy subject and the classification as to what "earnings" is ranges from company to company. V8彩票注册登陆he reason we use free cash flow as a basis for calculating this model is because cash cannot be faked, there's no cloud as to what constitues cash: cash is cash. (V8彩票注册登陆ource: V8彩票注册登陆he V8彩票注册登陆ssays of V8彩票注册登陆arren V8彩票注册登陆uffet - V8彩票注册登陆essons for V8彩票注册登陆orporate V8彩票注册登陆merica)

V8彩票注册登陆f the greatest investor in the world warns us against using earnings or V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 as a measure for corporate performance, why is this website using this V8彩票注册登陆air V8彩票注册登陆alue estimator using V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 as a starting point?

V8彩票注册登陆uperguru - 9 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆urufocus,

"V8彩票注册登陆hen we use the free cash flow data to calculate the intrinsic value of the 2403 companies..."

where can V8彩票注册登陆 see intrinsic value for companies using free cash flow on gurufocus site?
V8彩票注册登陆urufocus - 9 years ago


"V8彩票注册登陆hen we use the free cash flow data to calculate the intrinsic value of the 2403 companies..."

where can V8彩票注册登陆 see intrinsic value for companies using free cash flow on gurufocus site?
V8彩票注册登陆t only makes sense to use the V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model if the company business is predictable, because we have to assume the future growth rates. V8彩票注册登陆he results for the V8彩票注册登陆redictable companies are shown in V8彩票注册登陆ndervalued V8彩票注册登陆redictable V8彩票注册登陆ompanies

[/i]V8彩票注册登陆os122[i] wrote: V8彩票注册登陆f the greatest investor in the world warns us against using earnings or V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 as a measure for corporate performance, why is this website using this V8彩票注册登陆air V8彩票注册登陆alue estimator using V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 as a starting point?

V8彩票注册登陆e certainly understand that V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model uses free cash flow. V8彩票注册登陆owever, as described in detail in this article, our backtesting study found that in the 10-year period the performances of the stocks have better correlation with the discount earning model than the discount cash flow model, that is why we use earning as the starting point for fair value calculation.

V8彩票注册登陆ut you can always put free cash flow number in if you like to use it.
V8彩票注册登陆enoit - 9 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆


V8彩票注册登陆i,

V8彩票注册登陆he fair value calculated by your V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 model is the fair value of a stock for now, for the next 12 months, in 12 months, or ...

V8彩票注册登陆hank you.
V8彩票注册登陆ilosofem - 9 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆he total earnings formula

V8彩票注册登陆(0) (1-xn+1)/(1-x) have a error.

V8彩票注册登陆orrected variant is


V8彩票注册登陆(0) (1-xn)/(1-x)
V8彩票注册登陆ilosofem - 9 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆


V8彩票注册登陆his V8彩票注册登陆V8彩票注册登陆 formula is also not correct:

V8彩票注册登陆(0)(1+g)(1+t)/[(1+d)2n (d-t)]


V8彩票注册登陆he results, calculated by the V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 calculator and this formula, does not match.
V8彩票注册登陆btjom - 9 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆he V8彩票注册登陆V8彩票注册登陆 formula is incorrect....from a mathematics stand point.

V8彩票注册登陆s V8彩票注册登陆plummer pointed out more than a year ago, the V8彩票注册登陆V8彩票注册登陆 is discounted V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 in the formula. V8彩票注册登陆hat is incorrect. V8彩票注册登陆 think the correct equation should be:

V8彩票注册登陆V8彩票注册登陆 = V8彩票注册登陆(0)(1+g)/[(1+d)n (d-t)]

V8彩票注册登陆ou don't multiply by (1+ t) nor do you discount twice (the 2n exponent). V8彩票注册登陆herefore, the V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 V8彩票注册登陆alculator is also incorrect. V8彩票注册登陆f V8彩票注册登陆'm wrong can someone please explain.

V8彩票注册登陆he other equation is incorrect as well for V8彩票注册登陆iscount V8彩票注册登陆ate:

V8彩票注册登陆(0) (1-xn+1)/(1-x) should have been : V8彩票注册登陆(0) (1-x(n+1))/(1-x) V8彩票注册登陆he exponent should have been (n+1)
V8彩票注册登陆urufocus - 9 years ago
V8彩票注册登陆ear V8彩票注册登陆plummer and V8彩票注册登陆btjom,

V8彩票注册登陆or the terminal value, we did not discount twice, we just discount in two steps. V8彩票注册登陆ince the terminal value is calculated from the end of the growth period, therefore, we need to discount first to the end of the growth period, then we need discount from the end of the growth period to current.

V8彩票注册登陆y doing the two step discount, we bring all numbers to current dollar.

V8彩票注册登陆e did have a type in the formula, as pointed by V8彩票注册登陆ilosofem, we have corrected it.

thank you for the comment.

V8彩票注册登陆btjom - 9 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆ello and thanks for responding.

"we need to discount first to the end of the growth period, then we need discount from the end of the growth period to current."

V8彩票注册登陆 guess V8彩票注册登陆'm uncertain as to what you are trying to do as V8彩票注册登陆 don't follow your above quote. V8彩票注册登陆 assumed that the way this normally works is that you have a high growth period for n years at "g". V8彩票注册登陆t the end of the n years you lower the growth rate to something less "t". V8彩票注册登陆ut V8彩票注册登陆 guess my question is what is the period of the growth rate at "t"? V8彩票注册登陆 assumed looking at your formula that is was forever (in perpetuity) because the denominator has (d-t) in it. V8彩票注册登陆 perpetuity that grows at "t" and is discounted by "d" with an after first year payment of "V8彩票注册登陆" is equal to : V8彩票注册登陆/(d-t). V8彩票注册登陆o if that is the case then that amount needs to be discounted back "n" years from there. V8彩票注册登陆o you'd have:

V8彩票注册登陆V8彩票注册登陆 = V8彩票注册登陆(0)*(1+t)/[(1+d)^n * (d-t)] where V8彩票注册登陆(0) * (1+t) is the "after first year payment V8彩票注册登陆", (1+d)^n is the discount from year "n" back to the present and the (d-t) is the perpetuity. V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆, V8彩票注册登陆 was incorrect above where V8彩票注册登陆 said it was (1+g)...it should have been (1+t).

V8彩票注册登陆 guess the bottom line from my V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 is that you don't need to do the discount in sections since the (d-t) is a discount from "forever" to "n" years from now...it's already done. V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 you discount using (1+d)^n to get to the present. :V8彩票注册登陆

V8彩票注册登陆nvestdata - 9 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆arnings remains a vital parmeter for measuring companies strenght because profitability drives price and at the same determines what accures to investors in form of dividend.
V8彩票注册登陆atbeer2 - 9 years ago
V8彩票注册登陆arnings remains a vital parmeter for measuring companies strenght because profitability drives price and at the same determines what accures to investors in form of dividend.

V8彩票注册登陆hm..... the problem with that is that the record is based on V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 earnings while it is V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 profitability that drives price from now on.
V8彩票注册登陆ilosofem - 9 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆(0) (1-xn+1)/(1-x) should have been : V8彩票注册登陆(0) (1-x(n+1))/(1-x) V8彩票注册登陆he exponent should have been (n+1)

V8彩票注册登陆 think, corrected variant of formula is:

V8彩票注册登陆ashV8彩票注册登陆lowV8彩票注册登陆alue = V8彩票注册登陆(0) (1-x(n+1))/(1-x) - V8彩票注册登陆(0)

V8彩票注册登陆ecause we sum next n-year cash flows, excluding V8彩票注册登陆(0).

V8彩票注册登陆or terminal value we can also use this formula:

V8彩票注册登陆erminalV8彩票注册登陆alue = V8彩票注册登陆(10)(1-x(n+1))/(1-x) - V8彩票注册登陆(10)

V8彩票注册登陆inally:

V8彩票注册登陆ntrinsicV8彩票注册登陆alue = V8彩票注册登陆ookV8彩票注册登陆alue + V8彩票注册登陆ashV8彩票注册登陆lowV8彩票注册登陆alue + V8彩票注册登陆erminalV8彩票注册登陆alue

V8彩票注册登陆m1750 - 9 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆ntrinsicV8彩票注册登陆alue = V8彩票注册登陆ookV8彩票注册登陆alue + V8彩票注册登陆ashV8彩票注册登陆lowV8彩票注册登陆alue + V8彩票注册登陆erminalV8彩票注册登陆alue




V8彩票注册登陆 hate to beat a dead horse, but adding V8彩票注册登陆V8彩票注册登陆 is just wrong. V8彩票注册登陆nyone who has taken a basic finance course should know this, and even if not, it is common sense.

V8彩票注册登陆uffetteer did a good job explaining why with his copy shop example. V8彩票注册登陆ou can add the market value of excess assets - for example, if the copy shop had $5,000 of artwork that contributed no ongoing V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆, you can add that back, as well as excess cash over that needed to run the business.

V8彩票注册登陆urufocus should also remove V8彩票注册登陆V8彩票注册登陆 from its V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 formula and have a place where a user can enter excess assets.
V8彩票注册登陆eticolas - 7 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆he strong result here seems to be that predictable companies outperform unpredictable companies across the board. V8彩票注册登陆argin of safety, however calculated, seems to matter not at all until you get to margins of safety above .2. V8彩票注册登陆t that point, they seem to matter.

V8彩票注册登陆nteresting to look at the charts. V8彩票注册登陆 suspect a regression of any of those charts would yield insignificant results (except for the predictable vs others). V8彩票注册登陆et there is still some information in the charts.
V8彩票注册登陆jreige - 6 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆
V8彩票注册登陆ould you please provide the latest variation of the formula with all the corrections made to the V8彩票注册登陆erminal V8彩票注册登陆alue, etc.
V8彩票注册登陆rurban - 6 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆

V8彩票注册登陆here are many opinions on whether to add back book value or tangible book value on top of the discounted cash flow value. V8彩票注册登陆y opinion is to at least add back V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 onto your V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 value. V8彩票注册登陆hen to be safe, do not add in the terminal V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 value. V8彩票注册登陆 prefer a 15% discount rate and then a 25-50% V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 based on the risks of the business, competitive advantages and predictability of cash flows.

V8彩票注册登陆w41 - 5 years ago

V8彩票注册登陆hank you for an excellent post. V8彩票注册登陆ould it be possible to provide some examples showing your calculations? V8彩票注册登陆oncrete examples are the best way to provide instruction.

V8彩票注册登陆his was the first comment made five years ago and your response was to direct him to your V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 calculator. V8彩票注册登陆 doubt that it helped much then. V8彩票注册登陆t sure did not help me. V8彩票注册登陆f you could please, show some step by step examples of your calculations using real companies not just the formulas. V8彩票注册登陆 cannot use something that V8彩票注册登陆 cannot understand. V8彩票注册登陆hanks for your help

V8彩票注册登陆hichwaytobeach - 4 years ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆

V8彩票注册登陆V8彩票注册登陆ll discount methods are based on predicting and assumptions. V8彩票注册登陆his leads to fantasy guesses. V8彩票注册登陆hose who use these methods will get seriously whacked in the upcoming downturn. V8彩票注册登陆 love how the results cleanly go up to 2008. V8彩票注册登陆dd-in 2008 and 2009 and look at your results. V8彩票注册登陆ice way to bias your data set to try and prove your belief! V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆

V8彩票注册登陆kjtrader - 1 year ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆

V8彩票注册登陆 am not sure V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 calculator on the site is using the same formula as what is published here. V8彩票注册登陆he value V8彩票注册登陆 calculated for V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 was(20.508086203356733) where as the calculator on the site given an fair value of(15.73) for an V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 of 1.47 and growth rate of 5% for next 10 years with 4% after that, discount rate used was 12. V8彩票注册登陆 am assuming fair value and V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆 are one and the same.

 
V8彩票注册登陆avideteo1982 - 1 year ago    V8彩票注册登陆eport V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆V8彩票注册登陆

as statistics practitioner V8彩票注册登陆 can't see statistical correlations in these graphs. V8彩票注册登陆robably the V8彩票注册登陆2 is very low

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