Valuing a company is not hard – there are very few things that can affect value in the long term, so as long as you focus on those, you’ll be fine.
Having a sound, simple framework for assessing value allows an investor to be much more efficient when making decisions. If you understand how value is created, it suddenly becomes apparent that 95% of the news flow about a company is not worth paying attention to. A good valuation is transparent, testable, and easily communicated to another investor.
Here is a transparent, testable valuation of Union Pacific (UNP), presented in less than two minutes.
Remember the words of Warren Buffett:
To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.
We can help you build a sound intellectual foundation for making decisions and show you how to better keep your emotions from corroding that framework. Contact me using the button below!