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How to Value Shares and Outperform the Market by Glenn Martin

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7. A Step-By-Step Guide to Valuing the market

In this chapter I will take you through, step-by-step, how to create a spreadsheet to calculate the intrinsic value of the FTSE100. I am treating the FTSE100 index as equivalent to the equity market since it accounts for 81% of the total market value and is, by far, the equity index most invested in by investors.

As an example I will use the valuation for 3 March 2009, when the FTSE100 reached its lowest point following the credit crunch crash. I will detail:

  • each input field and where to find the source data
  • each results or calculation field and the associated formulae
  • the cell references for each field.

You will need access to the internet. I suggest that you bookmark the websites consulted ...

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