SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Gorilla and King Portfolio Candidates
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Stock Farmer who wrote (43586)6/18/2001 3:15:08 AM
From: EnricoPalazzo  Read Replies (1) of 54805
 
Ok, that's fair. I agree that haggling over the discount rate isn't a great use of time.

I am not, however, convinced that the discount rate is the proper way to account for risk. That implies several things, like the risk is a multiplicative function of time, no? That may be true of some sorts of risk, but by no means all.

Isn't it simpler to say, "If I don't feel that I understand the company's prospects, or I feel that the company's prospects are fundamentally uncertain, I shouldn't invest in that company?" I think that's what Buffett is getting at when he just uses T-bonds. I.e. he's thinking of the discount rate as a correction for the opportunity cost, not for risk (he uses careful selection criteria and margin of safety for that).
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News