Approach

ValueBriefs is a collection of rough models I use to look for cases where a company’s plausible future valuation is far above its current one. A sufficiently large gap offers both meaningful upside and room for the analysis to be wrong without eliminating the return. The goal is not to calculate fair value precisely, but to identify significant differences between the market valuation and a plausible future outcome.

For individual businesses, posts work backward from a valuation to what the business would have to do to support it. The starting point may be the current valuation or a scenario in which the company becomes worth two, three, five times as much, or more. That may mean estimating the required revenue, earnings, production, customers, projects, capital investment, or market share. The analysis tries to view the company from the perspective of a business owner: what it must actually build, sell, earn, and reinvest to produce the proposed outcome, rather than through the overly financialized lens of the stereotypical Wall Street analyst who reduces a company to quarterly line items, ratios, and valuation multiples.

Some of the ideas behind this approach come from Benjamin Graham’s The Intelligent Investor, Seth Klarman’s Margin of Safety, Warren Buffett’s writing, and biographies of investors, business owners, and founders.

Large language models help gather and organize information, test calculations, draft, and edit. I choose the questions, assumptions, and conclusions and review what is published, but errors may remain.

Questions, corrections, and disagreements are welcome at austin@valuebriefs.com.

Nothing on this site is investment advice. The posts are simplified personal analysis and may omit information relevant to an investment decision.