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Strategies & Market Trends : Value Investing

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Graystone

To: Graham Osborn who wrote (61603)	1/1/2019 12:47:53 AM
From: bruwin	1 Recommendation Read Replies (1) of 78763

"For intrinsic value you discount all the cash flows from today through the end of time." Once again we have reference to DCF, discounted cash flow .... BUT what is the CENTRAL ELEMENT to that ongoing calculation ? ..... It's the CHOICE of an INTEREST RATE. And who knows how accurate that number will be, going forward, ESPECIALLY when one talks in terms of ... "through the end of time". If you are out by several percent in your choice of that rate then the calculated monetary value could be out by a very large relative amount when a particularly long time period is considered ...... In my personal opinion this "theory" is highly overrated ....

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