2min snip

The Security Analysis Podcast cover image

Geoff Saab: Low Risk Investing

The Security Analysis Podcast

NOTE

The Pitfalls of Projecting Growth Rates Linearly in Business Valuations

The author discusses their strategy of finding good businesses at good prices. They mention a chart that shows high projected growth rates underperform consistently. This surprises both clients and professional investors. The author attributes this phenomenon to people overpaying for growth and the practice of projecting growth rates in a linear fashion. They emphasize that this approach does not accurately reflect how the business world works.

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