i want to use a growth rate that's reflecting a bull market. I'm using historically reasonable current earnings number. The higher the minimum acceptable rate of return, the more conservative it is. i can tell you with a high degree of assurance that right now wall street is probably using an eight when they do this kind of stuff.
In Rule #1 investing, we call “buying on sale” purchasing stocks with a Margin of Safety. All you have to do to get a big MOS is know the value of the business you are buying—as a business—and then wait to buy it until the market drops much lower than the value. Today, Phil and Danielle dive deeper into Margin of Safety valuations, and explain why understanding how to value a company is critical to stockpiling.
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