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> All securities prices in publicly traded markets are essentially priced as discounted cash flows over the next 20-30 years Orthogonal, but I do enjoy how eve
by alextheparrot 6y ago
> All securities prices in publicly traded markets are essentially priced as discounted cash flows over the next 20-30 years
Orthogonal, but I do enjoy how every time I see a statement like this, it comes with a different year set of years. This one is 20-30 years, saw one yesterday at 50 years, Investopedia will tell you 5-10 years is the standard [1].
[1] https://www.investopedia.com/investing/pitfalls-of-discounted-cash-flow-analysis/ https://www.investopedia.com/investing/pitfalls-of-discounte...
- nateberkopec 6y agoYeah I just picked a number out of thin air. I suppose it depends on your discount rate + some arbitrary threshold of when you want to say the asset has returned most of it's useful cash flow. For example, a cash flow with a 10% discount rate will return about 90% of all it's discounted future cash flow by year 20. The discount rate depends on the investor, and as for when you stop counting cash flow on the way to infinity, I guess that's up to you.