Posted by stockoperator > 2014-08-02 13:47 | Report Abuse

Good. I really like EPV model as there is No assumption.

EPV model always gives quite a minimum value and the Model itself is Margin of Safety. You can even Buy at slight premium for some stable company.

Remember MOS is an Art. Don't be too meticulous and academic about MOS.

Why is that a rule of 30% MOS? Well, does Appollo needs 30% MOS? Probably yes probably No. That is why it is an Art.

Posted by emperor > 2014-08-03 15:16 | Report Abuse

Hi intelligent investor, may i know where u get the cost of capital and capitalized earnings figure? Somehow i don't know where to get those figures after the capitalized earning such as excess cash up to NOSH. Appreciate if you can teach me and will be much better if u can share the excel file. Thanks!

Posted by Intelligent Investor > 2014-08-03 22:32 | Report Abuse

Hi Emperor,

You can refer to http://intelligentinvestor8.blogspot.com/2014/07/dcf-valuation-apollo-6432.html for how I get the cost of capital.

And, you can read http://intelligentinvestor8.blogspot.com/2014/07/earnings-power-valuation-epv.html for the detail EPV valuation

Capitalized Earnings = Normalized Earnings / Cost of Capital.