Upside vs. Downside No Investment is so Wonderful

Evaluating Worst-Case Scenarios

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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.
Source: http://www.valueinvestorinsight.com/