hi great video ! question: why is the CAGR formula using 1/2 when the periods were 2020 - 2023 ? shouldnt it be 1/3 or am i missing something ? thank you !
@@BrentColeman thanks for the reply! another question i have is re the "growth rate". In the method presented in your video you used a growth rate based on assumptions of AMZN's growth (15%),, in some other DCF videos i've seen 4% used as "long-term growth rate" because that's about the rate of inflation,, is this the same figure that's being used above or is it so different because you are only projecting growth for 3 years instead of something like 10 ? thank you
@@jabrams3643 good question! It depends on the model used. Some calculators only go out 5 years, some even 20, some apply different rates for 0-5 and 5-10 years, there isn't a standard model. It all comes down to investor preferences and how they build their calculators, no two will ever agree on a single approach! Hope that helps!
the longer I invest in companies the less I trust a DCF😂… but interesting video. Too many predictions and assumptions in a DCF to make me feel comfortable. new sub. great channel
hi great video ! question: why is the CAGR formula using 1/2 when the periods were 2020 - 2023 ? shouldnt it be 1/3 or am i missing something ? thank you !
Very good pickup! Sorry, that was a mistake on my side! Should definitely be 1/3
@@BrentColeman thanks for the reply! another question i have is re the "growth rate". In the method presented in your video you used a growth rate based on assumptions of AMZN's growth (15%),, in some other DCF videos i've seen 4% used as "long-term growth rate" because that's about the rate of inflation,, is this the same figure that's being used above or is it so different because you are only projecting growth for 3 years instead of something like 10 ? thank you
@@jabrams3643 good question! It depends on the model used. Some calculators only go out 5 years, some even 20, some apply different rates for 0-5 and 5-10 years, there isn't a standard model. It all comes down to investor preferences and how they build their calculators, no two will ever agree on a single approach! Hope that helps!
Great Content Brent! Not all hero’s wear capes
Haha! Glad you enjoyed the video!
Hi Brent, that is a great tool, would you mind sharing it?
Absolutely! Please use this link: docs.google.com/spreadsheets/d/1dBHMDwnC5JCq6pSh5G_eojG6xSEBz8AjkpYpdANVXjM/edit?usp=sharing
@@BrentColeman thanks for that Brent.
the longer I invest in companies the less I trust a DCF😂… but interesting video. Too many predictions and assumptions in a DCF to make me feel comfortable. new sub. great channel