Tren Griffin @trengriffin I work for Microsoft. Previously I was a partner at Eagle River, a private equity firm established by Craig McCaw. I am on the board of directors of Kymeta. Nov. 19, 2019 1 min read

"Disney is trading at 23 times expected earnings, its highest forward earnings valuation since 2004"

"Multiples are not valuation; they are shorthand for the process of valuation. The value of a financial asset is the present value of future cash flows."  https://research-doc.credit-suisse.com/docView?language=ENG&format=PDF&source_id=csplusresearchcp&document_id=805915410&serialid=IJAOS3FI%2BcakbaWZ0z42Au9lhTKlpat0WWd0Q5DrOjs%3D&cspId= 

"In assessing capital allocation, consider incremental returns on capital first and growth second. Growth only creates value if the investments generate a return in excess of the cost of capital. Note that this return need not be immediate." Micael Mauboussin

"Past multiples are only relevant to the degree to which the underlying drivers of value are consistent through time. In fact, many of these drivers have changed, greatly diminishing the utility of past averages."

"A naive use of EV/EBITDA leads to valuation mistakes. The warranted multiple is predominantly a function of value creation, growth, and risk." Michael Mauboussin  https://www.bluemountaincapital.com/wp-content/uploads/2015/03/What-Does-an-EV-EBITDA-Multiple-Mean.pdf 

"The goal of a good DCF model is to avoid accounting vagaries and to zero in on the cash flow. Earnings fail to do this, and managements have a great deal of discretion in determining the earnings they report. As Alfred Rappaport said: 'cash is a fact, profit is an opinion.'" MM


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