Benjamin Graham's Intrinsic Value:
IR = Normalized EPS x Normalized PE ratio
Margin of Safety (MOS) = select stock selling for less than 2/3 of net current assets
Net Current Asset Value (NCAV) = Total current assets - Total current liabilities - Long-term liabilities
Buffett's Intrinsic Value:
IR = FCF / (R-g)
Owners Earning = CF op - CF Investing = Net Income + Depreciation - Capex - Working Capital
Buffett's 10 Investing Principles:
1. Businesses which have a repetitive consumer need with products that: wear out fast, are used up quickly, have brand appeal.
2. Businesses that provide repetitive services that people and businesses are consistently in need of.
3. Products that most people have to buy at some time in their life.
4. A business that we understand - stay within your circle of competence.
5. The quality of management, especially on the quality of leadership, operated by honest and competent people.
6. The industry's leader with substantial market share in its products.
7. Look for a strong economic franchise, long-term pricing power, high barrier to entry.
8. Predictability - in its business model and operating results.
9. Available at a very attractive price, selling at 33% discount on its intrinsic value.
10. High potential growth with consistent high growth in business and performance. Favorable long-term prospects.
