Absolutely love it. It is how i am trying to determine an intrinsic value of a business, that i am confident i know how and where it will be reinvesting the excess capital.
The one thing that looks quite a bit cloudy to me is how the period of reinvestments at above average rates affects the valuation today. For example, there are major differences between business that can reinvest 30% of the excess profits at 20% ROIC for 50 years and one that can Reinvest 30% of the excess pforits at 20% ROIC, but let's say for 20 years.
Absolutely love it. It is how i am trying to determine an intrinsic value of a business, that i am confident i know how and where it will be reinvesting the excess capital.
The one thing that looks quite a bit cloudy to me is how the period of reinvestments at above average rates affects the valuation today. For example, there are major differences between business that can reinvest 30% of the excess profits at 20% ROIC for 50 years and one that can Reinvest 30% of the excess pforits at 20% ROIC, but let's say for 20 years.
Have you tried to evaluate that factor?
Thank you for the great content.