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Strategies & Market Trends : Value Investing
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To: bruwin who wrote (57706)8/7/2016 12:24:45 PM
From: Graham Osborn  Read Replies (1) of 78673
 
Hi bruwin, the actual number you are using is the same in both cases, so the assumptions there are the same. In the equity-bond model however you assume a uniform growth rate for an extended period of time vs my assumptions in the model, which were flattening revenue. Therefore the equity-bond method (at least as Mary Buffett defines it) would actually be MORE aggressive. They worked OK when bond yields were declining over a period of years, but now I think its assumptions probably are garbage. DCF is often abused, but if applied consecutively it provides more flexibility than those simplifying formulae.
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