Neuren Media and Analyst Coverage, page-808

I have done an analyst course, and was mentored by one of Australia's more famous analysts whose particularly expertise was analysing tech companies. I did this fairly late in my investing life and while I learned how to do a proper DCF analysis, I decided not to add this to my investment process because the numbers that pop out were based purely on the guesses of the numbers you put in, in terms of sales/growth/etc. The numbers vary wildly dependent on the many many facts you are guessing at, from costs, to growth/sales, to timeframes, to discount rates. It may be the best system we have but it is a system made on pure guesstimates and seemed pretty pointless to me - I can guess what's happening with a company without spending hours building a DCF model - no offence to fyffee and others, love your work.

Where DCF analysis did seem to have merit was through noticing changes in the real data you used to work out what you were going to plug into the future years for the model. Noticing changes in certain aspects of company data that could lead to material changes in price (growth in inventory, increases in liabilities, etc). It was noticing changes in the existing data and forecasting off that that seemed to provide the most benefit, but again, I can guess what growing liabilities will do to a company without having a DCF analysis to tell me. I do understand that the industry can't go with the 'vibe' though and needs a way to get a number on paper, just don't think that the numbers mean too much given how much the number changes with small changes in your 'guessed' inputs.