I’ve used a 15% Discounting Rate. Removing the Margin of Safety, it becomes 19.50% (15*1.3). Ok, maybe this isn’t a great way to arrive at the expected returns, but it’s approximately fine. That isn’t the point though. Even if it’s 15%, the same things I mentioned above would still hold. Like I said, everything in investing is a function of Opportunity Cost. Everything.
The Cost of Debt Discounting is just a mechanical sell limit. I’m not trying to match it with anything or trying to figure out my next best bet. I immediately sell if it reaches that level, regardless of the company actually doing very well.
As far as inaccuracies are concerned, yes, I’m bound to be inaccurate with estimates. That’s why I purchase only with a wide Margin of Safety. There are times when I’ll be way wrong with my estimates (Based on consecutive worse results, for Instance). That’s when I should rethink my investment decision altogether.