Ultimately, there are dozens of valuation models but only two valuation approaches: intrinsic and relative.

A stock may look cheap relative to comparable companies today, but that assessment can shift dramatically over the next few months.

The intrinsic value of an asset is determined by the cash flows you expect that asset to generate over its life and how uncertain you feel about these cash flows.

In relative valuation, assets are valued by looking at how the market prices similar assets.

terminal value computation is not what growth rate you use in the valuation, but what excess returns accompany that growth rate.

The growth rate has to be less than the discount rate for the equation to work, but an even tighter constraint is that the growth rate used has to be lower than the nominal growth rate of the economy, since no asset can have cash flows growing faster than that rate forever.

If you accept the Markowitz proposition that the only risk you care about is the risk that you cannot diversify away, how do you measure the exposure of a company to this market-wide risk?

Oscar Wilde Defined a Cynic as One Who “knows the price of everything and the value of nothing.”

The macroeconomic risk that affects many or most firms cannot be diversified away. In the Markowitz world, this market risk is the only risk that you should consider, as an investor in a publicly traded company.