Ann: Change in substantial holding, page-9

Hi Mars, by theoretical discount rate I was referring to what I was prepared to pay rather than the market. To me a 5% FCF yield in a company that can produce compound earnings growth of 10% seems pretty decent when I can only get 1.9% p.a on cash or pay 4.5% p.a. on borrowings. ARB is a different risk/reward proposition at $15.00 than $23.50.  A PE of 20 seems reasonable, I agree that a PE of 30 doesn't and I wouldn't buy at those levels.  If the market falls another 20% and a basket of stocks like ARB could be purchased on a PE of 16 or so you would have a good chance of making decent money - I don't need a spreadsheet to tell me that.