Favourite valuation Techniques

[GorillaNerd]

@infinitybenzo

@Nerdyblop

majority of active funds are really index funds with higher fees. most of them have like 90 positions. is that truly active?

never thought of it that way…truly thinking outside the box…the flag ship fund i was part of which was equity arb fund at the last HF i worked at had more than 100 positions and $600MM AUM.

maybe this is why we are bunch of underperform galores united. Have 10 positions and either you die quick and gloriously or live to be famous after monstrous gains.

i recall reading that having 15 positions capture nearly 70 to 90% of market risk!

anyhow it does make sense to diversify fully as a manager since you dont want to be blamed for your stock picking while at the same time claiming to be a great stock picker. but dont expect your specific picks to have a large impact on your portfolio or outperform meaningfully esp net of fees.

[midwest_inVESTor]

I like to use a DCF to test the current stock price. For example, what assumptions do I have to make to spit out the current price. Are these assumptions reasonable, aggressive or conservative and what does that tell me about the current price?

A LBO model can be fun for small cap stocks and obviously useful for privately held companies.