kcchongnz, 

In essence...Which valuation methodology will be the governing criteria in stock disposal and stock selection....what are the mandatory artful input info to utilize in arriving at valuations.. 

Posted by tsurukame at Dec 3, 2013 06:46 PM

Each valuation method is suitable for a particular type of company. I don't use Graham net net valuation for company like Prestariang, Datasonic, JobStreet etc because they are basically asset light company but make high earnings and cash flow. For them I will use discount cash flows methods. PMCorp type of company has negligible earnings at the present moment and hence earnings based such as private market comparable valuations, DCFM are not suitable. Of course unless you can estimate its future earnings with confidence. Some companies have a lot of cash in the balance sheet and good amount of cash flows but may not earn much earnings may be suitable to use Gordon dividend growth model if the dividend is stable and growing. Some companies like Daiman, Plenitude, Gromutual have a lot of quality assets but also steady earnings and cash flow. So you can use many methods to counter-check, such as net-net, DCFM, EV/Ebit etc. 

Whatever method you use, you will get the estimated intrinsic value. Make sure the right method is used. Buy if the price is way below the intrinsic value, say 30% or more; and sell if the price rises close to intrinsic value, or if you need money to buy other better stocks. 

That is my personal preference.

Posted by kcchongnz at Dec 3, 2013 06:55 PM