How to calculate the intrinsic Value in the way of Warrent Buffett?
https://www.youtube.com/watch?v=TP-DfIHLb50
1. The definition and formula of intrinsic value
Warren Buffett:"Intrinsic value is the number that you get if you can predict all the cash the business can give you between now and judgement day, discounted at a proper discount rate"
Formula: Discounted present value of future cash
Earnings; Growth; Time
Factors: 1. Earnings, 2. Growth, 3. Certainty, 4. Discounted rate. How do we get those?
Cash available for distribution = reported earning + depreciation and other non-cash charges (capitalized expenditures for the business to maintain its operations as is + additional working capital needed)
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