A fundamental question: DCF

[DesertCat]

Buffett doesn't do DCF calculations, Charlie Munger has some quotes on it you might be able to google. You can't use CAPM, Charlie has some even more pointed quotes on that, basically since it's built on Beta makes it untrustworthy.

I don't anymore either, I once modeled the DCF values of a bunch of different growth rates and got a feel for the results, they corresponded fairly well with Graham's formula. So today I'd just use his formula as a rule of thumb. My guess is Buffett does something similar but not sure.

The problem with DCF estimates is that small changes over long periods can lead to very large changes in valuations. What is more important than if one business has a 17.7% growth rate or a 18.9% growth rate, is the quality of the business. How strong is it's moat, it's return on capital, how good is the quality of it's cash flows, etc.