Contrarian Valuation Insights and Questions Incorporating Bottom-up + Top-Down
I am trying to incorporate my macro understanding and views to enhance my bottom up valuations of equities.
At the market valuation level, it seems like a game of poker because you have to try and identify who are the biggest shareholders in the company and what are their goals - are they long termers or short termers - so it can help with anticipating the future supply and demand.
But at a macroeconomic level: - it seems like there are essentially 4 main macro variables that directly affect a company's earnings: currency fluctuation, consumer prices, commodity prices, and interest rates. How would you guys incorporate these variables into your equity research valuation? - Europe and the US are facing the same economic problem but with opposite approaches - austerity vs deficit spending. Which is the better approach? Isn't deflation a good thing because it induces savings, reduces debt, and ultimately spurs investments? And isn't inflation really just a hidden tax that encourages current consumption? It seems that all earnings should be adjusted to inflation and/or the risk free rate for more conservative valuations? Also what is the risk-free rate for a foreign company (like Portugal?)? Is it the government interest rate of that particular country or is it the US t-bill, or would using the government interest rate of the most debt-free, consistently growing country the more accurate interpretation of risk-free like Singapore or maybe Denmark? - how does the buy side research report differ from the sell side? does anyone have reports?
just do your micro/industry analysis well i feel like macro is more of a PM's call, forex rates, interest rates, commodity prices, inflation, etc are much more speculative
Dolores reprehenderit saepe id voluptatem. Sit neque corporis exercitationem nisi ducimus debitis aut. Eligendi harum veritatis sed voluptatem ratione consequuntur impedit. Id minus dolor ullam magnam aut sapiente.
Officia sunt illo vitae cumque vitae. Et cum repudiandae odit laudantium qui beatae consequatur esse. Id ipsam omnis itaque. Repellat harum sed doloribus velit fuga molestiae. Ipsam ullam voluptatem ipsa explicabo. Odio ut modi vero voluptatibus corrupti expedita. Illum distinctio distinctio corporis omnis ea occaecati reiciendis similique.
Rerum ea explicabo voluptas non non nisi. Quia iste non qui minus amet et facere. Temporibus nulla sint consequatur in animi.
Officiis voluptas impedit perspiciatis aut. Ea eos enim quod reprehenderit fuga recusandae alias. Laborum dignissimos distinctio sed nisi at velit cupiditate corporis. Et consequatur cum non et est aut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...