Anton, this article is gold. I like how they reference Aswath Damodaran. He's a god in the valuation space. I used to live off his articles when I was in PE. He helped me ramp a lot faster than I would have otherwise.
My three favorite sound bites:
1. "A company’s objective should not be simply to grow; it should be to grow such that it creates value. A company creates value when its investments earn a return higher than the opportunity cost of capital."
2. "Multiples are not valuation. They are a shorthand for the valuation process."
You cannot go wrong reading Damodaran or Maubboussin; you should sign up for his MSIM article as they are free. His new version of Expectations Investing is out too, which you might also enjoy. I like the your site and hope all is well.
Good breakdown CJ -- I really like focusing on a DCF as multiples embed too many relevant economic assumptions; Michael Mauboussin captures this well here: https://www.morganstanley.com/im/publication/insights/articles/article_themathofvalueandgrowth_us.pdf and in his book Expectations Investing.
Anton, this article is gold. I like how they reference Aswath Damodaran. He's a god in the valuation space. I used to live off his articles when I was in PE. He helped me ramp a lot faster than I would have otherwise.
My three favorite sound bites:
1. "A company’s objective should not be simply to grow; it should be to grow such that it creates value. A company creates value when its investments earn a return higher than the opportunity cost of capital."
2. "Multiples are not valuation. They are a shorthand for the valuation process."
3. “In the long run, everything is a toaster.”
You cannot go wrong reading Damodaran or Maubboussin; you should sign up for his MSIM article as they are free. His new version of Expectations Investing is out too, which you might also enjoy. I like the your site and hope all is well.