Evaluating Worst-Case Scenarios Pay up for Quality

No Investment is so Wonderful

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We firmly believe no investment is so wonderful that it can’t be ruined by a too high entry price, so on our discount-to cash-flow stocks we will not pay more than the market multiple on forward earnings. We want to avoid the temptation of making relative valuation bets – say, finding a software company attractive because it’s only 30x earnings when the group sells at 40x.
Source: http://www.valueinvestorinsight.com/