Quote:
Originally Posted by npg
Q: Why sell something you have gotten at a huge discount?
A: Because you don't trust your own analysis.
And quite right so. An estimate that relies on projecting a future PE is bound to be off by miles. Learn how to estimate intrinsic value and get off the roller coaster.
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NPG,
What method do you use for calculating intrinsic value?
I do admit that I am not 100% confident in Phil's method. But I do see a lot of merit in using his big 5 numbers to determine the overall health of a company.
AAII back-tested Phils strategy all the way back to 1998. Take a look at their results:
http://www.aaii.com/journal/200710/images/sschart1.gif