How to project the future when valuing companies

2024-05-14

One of the challenges when valuing companies is projecting the future performance. My trick to do this is to assumed that the future = the past.

Based on my understanding of the company and sector, I then judge whether the future is the same, better or worse.

I then use the past 10 years performance to value the business. If I get a margin of safety based on this, I would consider it very safe if I had judged that the future is either the same or better than the past.

Of course if there is no margin of safety, I look for another company.

If you found the above useful, I have other such hacks in my 500 pages value investing e-book, “Do You really want to master value investing”.

I am looking for feedback/review on the book. I am prepared to provide a pdf version free in return for the feedback and/or book review. If interested email me at i4valueasia@gmail.com

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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