When we wrote invested, we found a formula for owner earnings that was an attempt to understand warren buffet's formulation of owner earnings. It turns out there was some stuff i didn't know. Everything from this point on is just waiting to see if it goes on sale. Ah, and being confident that you understand the value of the business.
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.
For show notes and more information, visit www.investedpodcast.com.
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