Developed an Algorithm for Calculating DCFs, how useful is this?
Hey,
I'm a freshman at a semi-target business school, with a strong background in CS (was planning on studying CS before I switched to finance).
I have recently completed developing an algorithm that can perform a DCF valuation on any stock given the ticker (scrapes SEC fillings and uses an API for financials, forecast cashflows by analyzing historical data and growth rates, calculates WACC/CAPM using latest data etc). It is also relatively accurate (working on making it more), I spent a few weeks making this. Hypothetically could be used for making a DCF for every stock on the U.S market in < a few min.
A few questions I have:
- Is this anything special? i.e. is this a normal thing most funds/banks would already have?
- Would this be considered useful to a fund/bank, especially for ER or general analysis? (Would you find this helpful in your work?)
- Any ideas on how I can best word/leverage for networking? Should I mention this in cold-emails or show it to recruiters? Maybe put it on a website so people can use it? Should I make it open source or keep it private?
First time posting, apologies for any formatting issues. Any help would be greatly appreciated.
Cheers,
Not super helpful. The math is the easiest part. The hard part is figuring out underlying assumptions, market opportunity, detailed segment information, cost build, etc...
Not that useful. The future projections we use are either made up, based on sell-side research, or company financials. We probably wouldn't ever automate that. Second, I think its unlikely that it would be able to calculate an "accurate" WACC without being able to tap into BBG, and capital structure is always typically handspread for accuracy. Not sure what measure you are using to gauge its "accuracy".
Pretty sure something like this already exits where they even show you implied DCF assumptions based on current stock price.
FYI - no, it's not useful. I was on the sell-side and now on the buy-side, so I can speak for both sides.
Agree, that it's not useful for the reasons stated above. That said, I think it reflects well on you that you built this, and I'd encourage you to continue these sort of projects and eventually bring them up in interviews. I'd also link to your GitHub on your resume. Even though they may not be particularly useful, it shows (1) passion for finance and (2) competence in the increasingly important area of programming. If I was interviewing you, I'd be impressed.
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