Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Pirah Naman who wrote (47868)	10/14/2001 2:53:48 PM
From: Thomas Mercer-Hursh	Read Replies (2) \| Respond to of 54805

Most valuation methods have already been tested in real time, with real money Tested how? By having more money at the end than at the start? How do you know you wouldn't have made more or less with some other method? Where is the real testing here? Frankly, I just can't see Buffett throwing a bunch of numbers into a spreadsheet, getting out a 5.5 and deciding its a buy. I am sure that his valuation includes numerical elements, but I am confident that it is a far more detailed study of where the company is today, where he thinks it can or will be in some years, what that is likely to mean in the change of the stock price, and how that relates to the current price and the difference. Besides, by staying out of tech, most of the companies he is likely to be looking at probably would have trouble imagining 25% growth, especially on a sustained basis ... a very different realm of speculation than the 100% YoY growth we have seen in many of the companies we have looked at here. No, I am not suggesting that his or your methods are coincidence ... simply that without this kind of examination they just really haven't been evaluated and they certainly haven't been compared to alternate methods. Merely looking at a company closely enough to do a good FCF calculation is probably a good start on the kind of due diligence which helps a person to make sensible investing decisions, whether they calculate anything or not.