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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: FIFO_kid2 who wrote (66501)	2/11/2021 12:19:05 AM
From: petal	1 Recommendation Recommended By Lance Bredvold Read Replies (1) \| Respond to of 78819

Good points. Just one question: why can't FCF be manipulated? I know that it's commonly held to be an "incorruptable" measurement, but surely someone cold manipulate that one too? E.g., say that ones company has (non-existent) cash in a Swiss bank account, or simply lie and overstate cash – etc. etc. Ya know whattay mean? It seems like FCF is looked at something of a holy grail in this sense, even by Graham and Klarman and other highly conservative/skeptical investors –– whereas I feel that nothing is, unfortunately, holy in the domain of finance. _________ I highly doubt the lumber business will miraculously end up as a long term secular growth business LOL, yeah, no, I don't think so... not likely :=) _________ Re overstatement of BV. I don't know if it's common or not, but my go-to site for financial ratios lists P/Tang.BV separately, as a stand-alone ratio, which I love. Quite interesting to see how many c/o:s vastly overstate their P/B (I tend to disregard intangibles more or less completely, hence I regard a significant difference between P/B and P/B.Tang (say more than 100 %) simply as 'overstating'.) I can only see this metric for Swedish c/o:s, but especially among c/o:s with conspicuously perfect earnings or blatantly poor financials, this seems like a common trick. At first glance, book value can be low (around and sometimes below 1) but TBV can be very high (> 10 times higher) or even negative. To me, that's just a really cheap way of trying to fool the customer (i.e. 'investor'). You barely have to lift the hood to find out; still, I think it may fool many.

To: FIFO_kid2 who wrote (66501)	2/11/2021 1:09:26 AM
From: bruwin	2 Recommendations Recommended By JohnyP Lance Bredvold Respond to of 78819

"I will have to do a DCF analysis* to determine the fair value."* Ah Yes, the Discounted Cash Flow analysis ..... And here we have a formula very much based on the choice of one Very Important 'VARIABLE', "r" ..... DCF = (CF/1+r)^n) The more OUT one is with the choice of the percentage rate "r" the more will the outcome be OUT over the longer term .... Let's hope your choice of "r" is close to the mark ....

To: FIFO_kid2 who wrote (66501)	2/11/2021 7:04:33 AM
From: bruwin	Read Replies (1) \| Respond to of 78819

"The main risks in book value analysis is goodwill and obsolescence" Yes, and for the following "airy-fairy" quantifiers created, more often than not, by Accountants who put their "monetary values" to these "abstract" components .... "The value of a company’s brand name, solid customer base, good customer relations, good employee relations, and proprietary technology represent some reasons why goodwill exists." ..... which is why, IMO, TANGIBLE Book Value is a more realistic number if one is going to refer to "Book Value".