“If I were running a business school I would only have two courses. The first would obviously be an investing class about how to value a business. The second would be how to think about the stock market and how to deal with the volatility.”
WARREN BUFFETT (WWW.THEBUFFETT.COM/QUOTES/VALUATION.HTML)
THE MOST CHALLENGING step in fundamental analysis is valuation, i.e., the computation of a stock’s intrinsic value. The problem is that business valuation is more of an art than an exact science. It requires a lot of estimates, projections, qualitative and quantitative considerations, and so on. Indeed, the value of a business depends on its future cash flows, which, in theory, have to be estimated based on a thorough fundamental ...