As for passing of pricing as value, it strikes me as inconsistent to use the market to get your pricing number (by using multiples and comparable firms) and then argue that the same market misprices the asset in question. Pricing Catalysts: Since you make money from the price adjusting to value, the presence of catalysts that can lead to this adjustment will allow you to settle for a lower MOS. Consequently, you should settle for a smaller MOS when investing in trendy boutique s in markets that you perceive to be more liquid and efficient than in assets, where the corrections will presumably happen more quickly than in inefficient, illiquid markets where the wait can be longer. This is all hypothetical, you may say, but there is evidence that markets have become much less trusting of central banking and more willing to go their own ways. Before you adopt it, you have to assess not only your own standing (including how much you have to invest, how risk averse you are) but also your faith (in your valuation prowess and that markets correct their mistakes). The first is an acceptance that, no matter how hard you try, your estimate of value can be wrong and the second is that even if the value estimate is right, there is uncertainty about whether the market will correct its mistakes over your time horizon.
In this reality-based central banking universe, the lowering of rates by central banks can have unpredictable and often perverse consequences, lowering financial asset prices, reducing real investment and making a currency stronger rather than weaker. 3. A DCF requires too many assumptions and can be manipulated to yield any value you want. 4. A DCF cannot value brand name or other intangibles. Perhaps not, but I have bought stocks that were priced at my estimated fair value and have held back on investments that I have found to be under valued by 25% or more. Phoenix candidates are stocks that have taken a pounding, or stocks that have fallen dramatically (70-90%) from the 52-week high. If you are considering using decorative veneers for your home, here are 5 reasons why you need to seriously consider going for them. This is going to be a factor on two levels. As I watch GoPro and LinkedIn, two high flying stocks of not that long ago, come back to earth my mind is drawn to two much told stories.