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QuestionsCategory: Valuation QuadrantValuation Method
Darren Seah asked 9 months ago

Hi Victor, 
I understand that different valuation methods (PE,PCF,PS ratio etc) are applicable for different types of companies. But like say for example I used 2 or 3 of the valuation methods (out of curiosity sake) to calculate the intrinsic value of a company and the values comes out to be vastly different from each other, can I be conservative and choose the lower intrinsic value just to be safe? Or should I just stick to 1 valuation method that is suitable for that particular company? 
Thanks a lot

1 Answers
Victor Chng answered 9 months ago

Hi Darren,
 
Yes, you can use the method but sometime being too conservative may cause you to miss the boat. On the positive note, you will get higher win rate for your investment. It really depend on your emotions, choose the correct style that will fit your character. The most important thing is that can you sleep well after using the method. 
 
Personally, I would prefer to use the suitable valuation method to value the company and stick to it.  
 
Hope this helps :)
 

Darren Seah replied 9 months ago

Sure, thanks a lot Victor!

Victor Chng replied 9 months ago

Welcome Darren :)