4min chapter

Value Investing with Legends cover image

Ross Glotzbach - The Power and Strength of Experience

Value Investing with Legends

CHAPTER

The Issue of Valuation and How Do You Approach It?

We want to ground it all in conservatism, we'd rather be approximately right and precisely wrong. We don't want to go much over the mid-teens free cash flow multiple as kind of that exit multiple if you will. And then we'll compare that number to replacement cost where it's necessary. Whereas this DCF spit out a number that's twice what you could pay to recreate this business. Well, then you better think pretty hard about that. Or maybe it validates that you've got a great moat. It's one of the two. Yes, I think this is absolutely right, that we should not run away automatically from environments that have been disrupted.

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