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Strategies & Market Trends : Value Investing
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To: JoJoK who wrote (53413)2/13/2014 5:21:05 PM
From: bruwin1 Recommendation

Recommended By
Sergio H

   of 78715
 
OT.

"the fair price for a stock is the present value of future cash flows, discounted at an appropriate rate".

So what is that rate ?

How sure can you be that the rate you have chosen is what it will be "x" number of years down the line ?

And if you make the wrong choice about that future percentage rate, which you have put into your Discounted Cash Flow equation, how accurate will that Present Value be that you have now calculated and which you are concluding is "the fair price for a stock" ?

And if you make the wrong assumptions about the future cash flows, how accurate will that Present Value be that you have now calculated and which you are concluding is "the fair price for a stock" ?
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