Mohacsy's Safe Portfolio Member Forum

[10nisman]

Obviously this calculation should not be used as a stand alone decision maker as there are always extenuating circumstances, not the least of which is management capability. For example if we had used last year's TGT profit numbers the fair value would have been $242.28 which means we're 33% below fair value. So the question in the case of TGT is, will earnings return to historical levels next year or will we be stuck in a value trap for a few years while TGT unwinds current issues facing all retailers?

This calculator is useless and nobody should be using it as a proxy of fair value. Do some real diligence, build a model, don't throw every company into the same ridiculous high level fair value proxy calculator utilizing the same book value and P/E multiples.

I highly recommend focusing on determining accurate cash flow and EPS numbers vs. utilizing the non-sense that is reported or found on Yahoo Finance. Also, downward earnings revisions have just started which means there is a long way to go before earnings and equities bottom out.