Opinions of fair value based on DCF calculations are necessarily inexact (rightly vague?). But, at least they at least ask the right question.
Since analysts’ reports are so important in our work of identifying and studying companies to invest in, we need to look at the strengths and weaknesses of these reports.
If we calculate the value of a common stock to be only slightly higher than its price, we’re not interested in buying
Take the probability of loss times the amount of possible loss from the probability of gain times the amount of possible gain.
Wrap up on the drawbacks of CAPE. A fair level for price earnings ratios has changed over the years.
Investors are reading CAPE all wrong.
A CAPE ratio of 26.91 does not prove the stock market is overpriced. The stock market today may be overpriced or underpriced. CAPE using a historic average as a benchmark just doesn’t tell us one way or another
No company under consideration will even be close to scrambling to pay its creditors.
There needs to be a skilled knight in the castle to protect and enhance the moat.
Some companies are in the seemingly fortunate position that they can maintain profit margins simply by raising prices.