Saturday, July 11, 2015

Model Dictates

The results of my modeling generally dictate my attitude toward investing in a company. This makes sense because presumably your best guesses about the future of that company go into your models.

The problem is that in general when I model a growth stock, I generally model a contracting multiple and when I model a value stock I generally model a stable to expanding multiple.

It doesn't take a rocket scientist to work out that usual outcome there wrt recommendations.

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