There is no perfect model in evaluating stocks. If there were, there wouldn't be market fluctuations and there wouldn't so many models competing for attentions.
Models exist to back up people's assertions. Good models can also provide order-of-magnitude estimates, and serve as sanity checks. Discount Cash Flow (DCF) is one such good model that has been widely used by people including gurus like Warren Buffett. But a cautionary note still: it only serves as one of the many reference points. If we rely solely on it, we are destined to make mistakes.
Models exist to back up people's assertions. Good models can also provide order-of-magnitude estimates, and serve as sanity checks. Discount Cash Flow (DCF) is one such good model that has been widely used by people including gurus like Warren Buffett. But a cautionary note still: it only serves as one of the many reference points. If we rely solely on it, we are destined to make mistakes.
