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Strategies & Market Trends : Free Cash Flow as Value Criterion

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To: Pirah Naman who wrote (191)11/11/1997 7:57:00 AM
From: Reginald Middleton  Read Replies (1) of 253
 
<Also while it may not have been your intent, some of your writings have suggested that FCF - based pricing does not project future FCFs and discount them. It does both, and while you use additional parameters compared to most, "your" method is a FCF - based pricing method.>

This is not true. FCF does not tell the whole story. FCF is part of the picture, but like I was telling Andrew, companies that efficiently invest all of thier FCF are worth more, while it appears that many on this thread think that the most FCF you have, the better. My methods do not subscribe to that mindset.
FCF methods do not project FCF's and discount them, DCF methods do. there is a difference, eventhough many would consider it a matter of semantics.
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