Stocks Valuation: Art or Science?
This is an “old age “ question that pondered all of us as an investor and question we hear from time to time. For me, I think stocks valuation is both a science and an art. We often hear that analysts are trying to find the so-called
”intrinsic value” of a stock or business and different model or methods of analysis would give a different result of valuations, sometimes the variance could be huge.
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| <Image Credit: Mishfitlife.com> |
Beauty (Value) Is In The Eye of The Beholder: Part 1
Valuation is a science because there are “
scientific element” involved in methods of valuation e.g using
DCF (Discounted Cash Flow ), SOTP ( Sum-of the parts ), Asset-Based Model (Relative Valuation ), Financial Ratio analysis (PB/PE/Div Yield etc ). Valuation is an art because it involved
“judgement “ about the prospect or
future of any company....
