The ART of Valuation

[kunal_Kumar]

SaReGaMa is showing growth on profits but sales is almost flat and not so consistent with profits. So bit different from what’s discussed above.

[cabilalkhan]

@desaidhwanil

My hunch is that as the large opportunity size is important for high quality business so is the time for “repeat” buy! One may consume Maggie/Nescafe/Horlicks every month and buy it again. However, replacement for CPVC pipe or sanitaryware happens after a decade.

Amazing observation even though the thread is going to be a decade old soon but I must say I ve never thought this way ( time for repeat buy i.e frequency). A totally new perspective for me.

[krishnasristy]

In today’s world of abundant information ability, a good assessment of CAP will give long, continuos and peaceful investment opportunities.

[Rohit_Rathi-060621]

Sir, can you please share tutorial links related to valuation of company?

[basumallick]

Aswath Damodaran has an excellent online curriculum for valuation. It is the same course that he teaches in class.

It is one of the best resources to get a hang of valuation.

[Rohit_Rathi-060621]

thank you for sharing.

[kchaharia]

Great learning experience while reading this thread on the art of valuation here.

I have a question - whether one should have higher allocation in the stocks one is willing to hold for longer duration or should have lower allocation. Does Investment Horizon also factor in as a parameter alongside Undervaluation and Conviction when determining Capital Allocation?

Thanks.

[Balaji1974]

In investment time duration is a major factor. We should hold companies that will prosper during good and bad times.

[jeewangarg]

Sir, Thank you very much for the insight.

Sir, Do you mean Astral has less chance to become 10 bagger from hereon

@basumallick

For example, Astral, a stock which has been very well discussed at ValuePickr. It is a wannabe brand, large scale of opportunity, was available cheap a few years back when most of us bought.

[jeewangarg]

@Nikhilg

There is an interesting checklist on how to think about sustainable moats (based mostly on Porter 5 forces) from a Mauboussin paper that I have cut and kept. While not all elements on the checklist are equally important, this has started to serve as a nice guiding tool for me. Hopefully the VP folks may find it useful as well:

May I request you to please give any example for each of the valuation checklist (if possible)

[Nitisha_Bohra]

Hi Donald,

Thanks for insightful information. These pointers definitely are sure to look upon while investing. With the dynamic business scenario, was thinking there should also be some points on how fast the companies can adapt. With the advent of SME exchange, the money flows in faster, thereby increasing competition.

Need thoughts on how can we measure flexibility of a company to adapt to industry dynamics.