This Week in Intelligent Investing

Equity Incentives and Long-Term Investing I Reverse DCF as an Analytical Tool

November 7, 2020

In this episode, John Mihaljevic hosts a discussion of:

How equity incentives affect long-term returns: Phil Ordway takes a look at some of the more excessive equity-based compensation practices at public companies, particularly in the tech sector, and how they may dilute long-term investors' returns. We discuss Twitter and selected other case studies.

Reverse DCF analysis as an analytical tool: Elliot Turner explains how he uses so-called "reverse" discounted cash flow (DCF) models in order to isolate the key variables that drive a company's valuation. One of Elliot's preferred analytical tools, reverse DCFs enable him to assess market-implied expectations and to develop a high-conviction variant thesis.

Chris Bloomstran rejoins us in the next episode.

Enjoy the discussion!

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