Shane, My model is a fairly standard Capital Asset Pricing Model that takes in earnings, growth rate, dividend payout ratio, risk free rate, R squared, beta, market multiple, etc. I can't get into any more detail as I sell the thing. But, believe me there is nothing magic about any of these models. It is the quality of the inputs that is important.
I am a linear guy. I simply look at the model and determine a fair price for a stock in 5 years. Then, I draw a line on a non-logarythmic chart from not until then. So, if I expect SLB to trade for $150 in five years, a gain of over $100, and it goes up $50 next year, I would probably consider it ahead of itself and bail out. However, since I am always tweaking the inputs, it is not set in concrete.
MB |
