Well nothing's perfect Elaine DDM and ERR also doesn't makes sense cos Dividend varies over the years, next year's dividend could only be 50% of this year's. How could you calculate something that you don't know? RF Rates also changes at an even more rapid rate than dividend. These are all yardsticks so to help anal-ist to have something to hold on to and measure possible/likely scenarios. They are not perfect but they are all we got at the moment.
Elaine Sui wrote: > /Well, I guess he did. But I was actually telling about Dividend > Discount Model and Equity Risk Premium, which are slightly different > from Gordon Growth Model. (Personally I think GGM doesnt make sense, > there is not such thing as constant growth rate, and it doesn't really > work on emerging countries) > > If he was here, I'd love to discuss this with him. > > Anyway, Richard said he's a newbie, so I guess we have to explain a > bit about valuation in the simplest way possible. Maybe you (or > anyone) can help him from technical point of view (if there's any..) > > > * > **Elaine*/* > * > On Mon, Jan 5, 2009 at 12:07 AM, jsx_consultant > <jsx-consult...@centrin.net.id <mailto:jsx-consult...@centrin.net.id>> > wrote: > > Ini rumus Gordon Growth Model: > > Price = Deviden / (Expected Return-Expected Growth) > > Expected Growth dianggap nol, lagi RESESI. > > Dulu kan diajarin kang okoy... hehehe... > > > --- In obrolan-bandar@yahoogroups.com > <mailto:obrolan-bandar@yahoogroups.com>, Elaine Sui <elainesu...@...> > wrote: > > > > *Listen to me. I'll explain this as simple as possible. Okay? > First, you > > must BUY now. That's all. lol..[?] okay seriously, you should > consider > > comparing stocks' DPR (dividend/price ratio) vs RFRR (Risk free > rate of > > return) or simply the average bank deposit rate + 1% spread. > > > > Dividend/Price Ratio should NEVER be allowed to go above RFR ratio. > > (otherwise it's undervalued) > > > > Example: > > Let's say a stock price is 1000. The dividend forecast is around > 100. That > > makes the DPR = 100/1000=10%. while the current risk free rate of > return > > (RFRR) is only at 8% > > > > You see the DPR is higher than the current RFRR. So, the stock > price MAY > > adjust itself to have 8% DPR, means the stock price' fair value > would be > > around 100/8% = 1250. So the stock may advance around 25% from 1000 > (to > > 1250) usually until the dividend is paid. > > > > Let's say for other stock, the dividend forecast is only 10. That > makes the > > DPR = 10/1000=1%, this means the stock price is way too high > compared to its > > dividend. So the stock price MAY plunge to 10/8%= 125 at worst, > usually soon > > after the dividend is paid. > > > > Case 1: > > BUMI. On June 2008, BUMI price was 8000. The announced > > > <http://economy.okezone.com/index.php/ReadStory/2008/06/12/21/118016/b > umi-bagi-dividen-usd317-jt > > <http://economy.okezone.com/index.php/ReadStory/2008/06/12/21/118016/bumi-bagi-dividen-usd317-jt>>dividend > > was 111, and RFRR is, let's say, 8%. The simple calculation would > be 111/8% > > = 13xx. That'd be the fair value of BUMI. > > > > Case 2: > > INCO. On Nov 1, 2007, INCO announced > > <http://www.antara.co.id/en/arc/2007/11/1/pt-inco-tbk-approves-an- > interim-2007-dividend-of-09787-per-share/ > > <http://www.antara.co.id/en/arc/2007/11/1/pt-inco-tbk-approves-an-interim-2007-dividend-of-09787-per-share/>>that > > it'd pay a dividend of $1 or around IDR 9000. INCO was 100k/share. > The RFRR > > is 8%, so INCO had a chance to rise to 9000/8% = 112k before the > dividend is > > finally paid. But the nickel price was already plunged at that > time, so the > > next dividend forecast fell, and so did the price. The latest > dividend cmiiw > > was around $0.2, that makes current fair value of INCO is around > 25xx. > > > > I made you confused, didn't I..? [?] this post makes me > less 'mysterious' lol > > wth.. I guess you'd love to have a night class with Elaine.. [?] > j/k.. > > > > Elaine > > * > > 2009/1/4 Richard S <richard...@...> > > > > > Para Suhu2x yg saya hormati.. saya sebagai newbi punya pertanyan > > > fundamental mohon bimbingannya .. > > > Bagai mana cari tau harga wajar sebuah saham, apakah dia uda > terlalu mahal > > > untuk di beli ato sudah mura dan boleh di beli? > > > Thanks in advance, Richard. > > > > > > > > > > > > > > > ------------------------------------ > > + + > + + + + + > Mohon saat meREPLY posting, text dari posting lama dihapus > kecuali diperlukan agar CONTEXTnya jelas. > + + + + + > + +Yahoo! Groups Links > > > mailto:obrolan-bandar-fullfeatu...@yahoogroups.com > <mailto:obrolan-bandar-fullfeatu...@yahoogroups.com> > > > >
