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Are you suggesting that if Fed stopped QE1/2/3 , then discount rates would go up & therefore the DCF valuation will come down? But- if one did a sensitivity an
by nrao123 13y ago
Are you suggesting that if Fed stopped QE1/2/3 , then discount rates would go up & therefore the DCF valuation will come down?
But- if one did a sensitivity analysis for changing discount rates & valuation - it wouldn't be the key driver for high growth companies like Facebook & Tesla.
Damodaran has done a somewhat detailed analysis on TSLA & FB & changing discount rates don't seem to be a big factor in valuation.
http://aswathdamodaran.blogspot.com/2013/09/valuation-of-week-1-tesla-test.html?m=1 http://aswathdamodaran.blogspot.com/2013/09/valuation-of-wee...
- adventured 13y agoThe stock market would crash if the Fed stopped QE. Every time there has been even the mere talk of tapering or an end to QE coming - no actual tapering has ever occurred - the stock market tanks. Wall Street parties every time they get confirmation QE is going to continue. Every headline on CNBC et al. tends to track specifically what the Fed is going to do regarding their debt monetization and housing inflation programs. Immediately after it's confirmed the Fed will continue to devalue the dollar and inflate assets with low interest rates and QE, the stock market spikes higher. This has been the pattern for years now.