Upside vs. Downside No Investment is so Wonderful

Evaluating Worst-Case Scenarios

We look back as far as possible to inform what would be the worst-case levels of revenues and margins, and then apply what we think are trough multiples to the resulting worst-case earnings. If the worst case is more than 20% below the existing share price we won't buy it, no matter how much the discount is to our intrinsic value.