It is never too late to learn new things

[buynholdisdead]

@ajm101

I don’t think that’s an indictment of DCF. Tesla is just a pretty unique company in a lot of ways. It looks like Damodaran sold at a split adjusted price around $43? I bet he wishes he held, but sometimes one makes mistakes. What is Buffett’s #1 rule, though?

There are a lot of unique companies out there and that is only one of them. That also isn’t the only DCF that Damodaran ran on Tsla and he has admitted that it was pretty much a failure.

@ajm101

DCF is a tool, not a strategy, and I disagree with you that they are worthless for high growth companies. Models are models, and GIGO applies. Let me extend my example from earlier. Say we have “company 5”, that sits around doing R&D for 5 years, then releases a blockbuster that creates a $500M annual profit invention that grows 10% annually after it debuts to the world. What is that worth?

Let’s say you project it to grow at 10% and instead it grows at 100 percent, now what does your model look like. The problem with High Growth companies is that they can grow much faster for a lot longer than most people think.

** As a counterpoint, lets look at Upstart, and My Portfolio at the End of Aug 2021 - maybe a DCF analysis wouldn’t have helped here, but UPST is down almost 90% from that post. We are trying to predict the future when investing, and that is intrinsically risky to the downside and upside.**

If you followed UPST I am sure that you wouldn’t have been able to build a model to project it’s growth. Especially with all the rate hikes we went through. Let us see you do a model on Upst now for the next 5 years and see just how well you do with it.

Andy