Coburn Ventures Podcast # 85: De-Professionalizing Valuation. The Dark Side of the Moon Part V.
Feb 3, 2022
Dive into the intriguing concept of de-professionalizing valuation in investment practices. The conversation challenges traditional methods, questioning their effectiveness in today's fast-paced market. Discover the need for innovation and emotional insight in valuation strategies, while examining the limitations of conventional metrics. Explore how market instability and company culture influence investment approaches. Finally, learn the importance of resilience and embracing uncertainty as key to navigating the unpredictable financial landscape.
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Professional Standards Can Trap Insight
- Professional standards in investment valuation have become rigid traps that hinder actual insight.
- Comfort with flawed norms blocks breakthrough understanding and creates opportunity for arbitrage.
Terminal Growth Rates Matter Deeply
- Valuation is inseparable from fundamentals, especially terminal growth rates which are often oversimplified.
- Ignoring terminal growth rate variation misguides valuation, presenting a major investor opportunity.
Instability Drives Valuation Shifts
- The internet caused quantum leaps in instability and information access, driving major valuation shifts since mid-1990s.
- Instability accelerates change, winners, losers, and market adaptation at an unprecedented pace.