Grinch spoils the party, page-20

I mentioned that my set of TP calculations was not a valuation, because it relies on Mr Market being exuberant some time into calendar year 2020. That is where the PER of 15 comes in. As a proxy for a valuation, the analysis could, I think, be used with a MOS (margin of safety). Mathematically, that adjusts the effective PER. Sticking with my PER of 15, we get:

.. MOS .. PER .. Effective PER
10.00% .. 15 .......... 13.50
15.00% .. 15 .......... 12.75
20.00% .. 15 .......... 12.00

When it comes to valuations by individuals, my view is that there are many valuations – for example, when buying, when selling, and these in themselves have shadings in respect to the value of the transaction, and availability of funds, or an alternative need for funds. Further, the question of portfolio balance affects buying and selling sentiment. The sentiment box in HC is far too binary to convey what one might be thinking. Even investors sometimes dabble in trading, and the price-picking logic there is entirely different.

I intended writing something like this at the end of my previous post, but having stayed up until the wee hours of this morning, I was keen to go to sleep, and I forgot.