If i owned all of this business, i really could pocket the owner earnings. That doesn't mean that i'm going to be able to literally get an 11 % cash yield on my 90 dollar purchase. Nothersonna going to give me ten dollars a share every year in cash flow is just theoretical. What i want to see is that the owner earnings are real. I know the business well enough that the owner Earnings are real. The business would continue to operate and it's not going to suddenly fall apart because i've somehow here. Pretty simple. You gess can calculate that on anything. M co, ok, thoughts questions.
You’ve done the initial Four Ms analysis of companies on your watchlist, but your work is not complete. The next step in the researching process is critical, and tells you whether or not the business is worth purchasing. Being at this point in your analysis means that you’re highly confident that the company is going to be larger and more productive in ten years. Today, Phil and Danielle discuss this next step in the research process, and cover how to calculate margin of safety using the ten cap valuation process.
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