昨日阅读2小时。 总阅读时间86小时
Book of Value - The Fine Art of Investing Wisely 2016(Anurag Sharma)
https://bbs.pinggu.org/forum.php?mod=viewthread&tid=6303889&from^^uid=109341(Page 123-153)
阅读到的有价值的内容段落摘录
How to value a business (market value and capitalisation ratio), Risk and uncertainty, Simple math valuation
It is common to base market appraisals of a stock on the pricing of stocks of “similar” businesses using certain normalized ratios. The challenge in this kind of analysis, however, is to find market transactions involving businesses that are similar to yours in such terms as specialization, geography, demographics, size of markets or clientele served, size, and profitability. No two businesses are exactly alike, and trying to find an identical twin in the world of business is quite difficult indeed. Hence, once you locate several transactions involving similar businesses, you then make necessary adjustments to account for unique attributes or circumstances. As in housing appraisals, moreover, the adjustments are a result of subjective judgments based on the particulars. Typically, therefore, we assess the market value of equity using ratios such as price/sales, price/earnings, price/book, price/cash flow, and so on. That is, we capitalize the variables in the denominator to get a sense of how the market is pricing each dollar of sales, earnings, book value, or cash flow. Which particular ratio is best in a given situation depends on the business. It may be, for instance, that similar businesses have been selling at a price that equals revenues. In valuation parlance, this means that the market is capitalizing revenues by a factor of 1. On the other hand, the market may be capitalizing not revenues but free cash flows and by a factor of, say, 4. In that case, the market value of a business with, say, $10 million in annual free cash flows would be approximately $40 million. It helps to be familiar with the nature of business and with ongoing transactions in the marketplace to know which ratios to use as rules of thumb in particular cases
昨日阅读2小时。 总阅读时间86小时
Book of Value - The Fine Art of Investing Wisely 2016(AnuragSharma)
https://bbs.pinggu.org/forum.php?mod=viewthread&tid=6303889&from^^uid=109341(Page123-153)
阅读到的有价值的内容段落摘录
How to value a business (market value and capitalisation ratio), Riskand uncertainty, Simple math valuation
Itis common to base market appraisals of a stock on the pricing of stocks of“similar” businesses using certain normalized ratios. The challenge in thiskind of analysis, however, is to find market transactions involving businessesthat are similar to yours in such terms as specialization, geography, demographics, size of markets orclientele served, size, and profitability. No two businesses are exactly alike,and trying to find an identical twin in the world of business is quitedifficult indeed. Hence, once you locate several transactions involving similarbusinesses, you then make necessary adjustments to account for unique attributesor circumstances. As in housing appraisals, moreover, the adjustments are aresult of subjective judgments based on the particulars. Typically, therefore,we assess the market value of equity using ratios such as price/sales,price/earnings, price/book, price/cash flow, and so on. That is, we capitalizethe variables in the denominator to get a sense of how the market is pricingeach dollar of sales, earnings, book value, or cash flow. Which particularratio is best in a given situation depends on the business. It may be, forinstance, that similar businesses have been selling at a price that equalsrevenues. In valuation parlance, this means that the market is capitalizingrevenues by a factor of 1. On the other hand,the market may be capitalizing not revenues but free cash flows and by a factorof, say, 4. In that case, themarket value of a business with, say, $10 million in annual free cash flows wouldbe approximately $40million. It helps tobe familiar with the nature of business and with ongoing transactions in themarketplace to know which ratios to use as rules of thumb in particular cases
This, in essence, isthe discounted cash flow (DCF) technique of estimating the economic worth orintrinsic value of a business. It does not give you an answer per se, but ithelps estimate ballpark numbers that you can then use to make a businessdecision. Of course, the final NPV number varies widely depending on theassumptions you use. What the future cash flows of a business are likely to beand how uncertain you think those cash flows are—these can vastly influence thefinal estimates of value. In such analysis, therefore, precision does littlegood, whereas reasonableness of assumptions is paramount. The need tounderstand assumptions then forces a close look at the drivers ofprofitability.
PerpetualBond Value =(C/r), where C isthe constant annual coupon, and r is the constant discount rate.
Perpetual Bond Value = C * (1 + g) / (r − g) where C′is the coupon paidout at the end of year 1, r is the discount rate,and g is the constant perpetual growth rate. Because of the growth, C′canbe rewritten as C *(1 + g) to reflect thecoupon at the end of year 1.
3.阅读到的有价值信息的自我思考点评感想
- While the DCF technique is theoretically sound, note two shortcomings. First,since the outcome of such analysis is so much a function of assumptions and gutfeel, you get widely varying NPV numbers depending on the assumptions. It isimpossible to get a fix on true value using DCF analysis. Second, even if“true” value did indeed exist, and you did somehow correctly compute it, thereis no assurance.
- Inorder to make good judgments, we need to ensure that our beliefs are reasonableand consistent with well-developed standards of logic and data. Moreimportantly, we need a systematic way of updating our beliefs by seeking andbeing alert to new information. The principle of negation and the derivativeframework of disconfirmation help us make good subjective judgments. They arethe basis for making subjective but rigorous assessments of data that pertain toa given investment thesis. - The theory is that, under specific conditions whenmarkets are functioning smoothly, prices will be correlated with theirunderlying value, and the two will converge, more or less.
- valuationsobtained by discounting expected future flows are most applicable to stablecompanies with long histories and a sustainable business model that will allowthem to continue as going concerns. For many companies with checked historiesor no history at all, grounding prices in credible economic fundamentals may beimpossible. Cautious investors should limit their search for investment valueto companies that have a sufficient and credible record of operatingperformance.
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