A Better Way to Intrinsic Value
Focus on expected returns from conservatively forecast cash flows and not on the false precision of academic models, writes Morningstar’s Sam Lee.
A version of this article was published in the May 2014 issue of Morningstar ETFInvestor. Download a complimentary copy here.
In the first part of this two-part series, "Understanding Intrinsic Value," I briefly described intrinsic value and its relationship with time and risk. In this second and final part, I describe a more practical way to apply the intrinsic-value framework.