The Nature of Integrative Valuation

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The longer we forecast our estimates, the more room for error there could be. Forecasting is nothing to do with uncertainty or precision. It's got everything to do with how close your company is to being a mature company. How long you have to forecast cash flows again hasNothing to do with your predilections as an investor. The nature of intrinsic is the discount rate should reflect the risk of the company.

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro

03:53 - The importance of having an investment philosophy and how to figure out what your investment philosophy is.

The difference between having an investment philosophy and strategy.

03:53 - An example of what a growth investor’s investment philosophy may be, such as the famous growth investor Peter Lynch.

08:22 - Why Aswath believes it’s better to be a generalist than a specialist in one area of investing.

15:00 - What are value drivers and how to apply them in our valuation process?

15:00 - The 5 basic variables we need to value any business.

24:27 - How to convert these value drivers into a DCF or intrinsic value model.

26:23 - The most common mistakes investors make when valuing a company and how to avoid these.

26:23 - Aswath’s test on how to figure out if your growth rate is reasonable.

29:23 - How to figure out what discount rate we should use?

36:11 - Why Aswath doesn’t believe in a “hold forever mentality” of stocks in a value investing approach.

37:24 - How often we should revisit our valuations for companies?

56:53 - How do companies get on Aswath’s radar?

And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

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Related Episode: Listen to MI226: Investing in Small Cap Stocks w/ Rayna Lesser Hannaway, or watch the video.
Related Episode: Listen to RWH005: Meet the Master w/ Aswath Damodaran, or watch the video.

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