tag:blogger.com,1999:blog-5250592099846123314.post367202097198029758..comments2024-02-14T16:08:35.337+08:00Comments on Wealth Buch -- Journey towards Financial Freedom: Cerebos Pacific Ltd Part 2JWhttp://www.blogger.com/profile/04633191740991225888noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5250592099846123314.post-90646410532729484322010-02-17T08:52:50.511+08:002010-02-17T08:52:50.511+08:00Hi MW,
the company did mention that they do not n...Hi MW,<br /><br />the company did mention that they do not need to look into new markets because the potential in current markets is still very high.<br /><br />DCF is just an estimation. So far, it has served me well as it gives a good estimation of value. The key word is estimation. And with that estimation comes the margin of safety, which will allow us a rather safe haven. I will attempt to research into what you mentioned as well in part 3.<br /><br />Afterall, I'm still learning :)JWhttps://www.blogger.com/profile/04633191740991225888noreply@blogger.comtag:blogger.com,1999:blog-5250592099846123314.post-70692947542559403212010-02-17T01:18:04.913+08:002010-02-17T01:18:04.913+08:00Hi JW,
Thanks for the DCF analysis and your compu...Hi JW,<br /><br />Thanks for the DCF analysis and your computation of fair value. I always frown upon DCF because the assumptions are rather optimistic. For example the growth rate of 8% per annum for the next X years, just because the company has achieved 8.73% growth for the last X years. Earnings are notoriously tough to predict and I'd say there will most likely be down years as well as up years; plus inflation rate will probably fluctuate too but it's OK to use an average of 3%. Also, assuming you use DCF, are you discounting earnings into perpetuity? This assumes the company will be a going concern literally forever!<br /><br />I was hoping to see the numbers as in financial analysis for revenues, gross margins, expenses, net margins, ROE, gearing etc. Those are what determines if a company is sound and worth purchasing, besides the qualitative factors you've put up. Great job on the analysis so far! But I am still waiting for some numbers hehe...<br /><br />Cheers,<br />MusicwhizMusicwhizhttps://www.blogger.com/profile/10950754156386935254noreply@blogger.com