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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Stock Farmer who wrote (43574)	6/16/2001 9:04:43 PM
From: EnricoPalazzo	Read Replies (1) \| Respond to of 54805

If their actual Weighted Average Cost of Capital is greater than the risk free rate, it's because they can't convince themselves, their bankers and so on that their projects are risk free. These are the "other people" who set this WACC. Feel free to claim better insight into the company than this crew. Yikes. The question is why I should favor the assessment of investment bankers over my own? If I thought myself an incapable judge of the company's prospects and risk, I'd be buying index funds. I'd also be richer than I am :) The trick is to find companies with better growth prospects, and less risk, than is generally attributed to them, no?