[nmmoooreland20]

(02-19-2012 12:30 AM)zeeman Wrote:  

(02-17-2012 02:50 PM)Entropy Wrote:  

(02-17-2012 02:40 PM)zeeman Wrote:  

the shortcomings of the DCF model is simply it has too many assumptions, although if those assumptions are right it's pretty accurate. it's unlikely interest rates and growth rates are readily predictable.

On top of that the competing financial investments at the time that analysis was done could change dramatically over time. The general macro structure of the market, the cyclical nature of the market can also mess things up.

Do you trade/invest too?

I study economics at university and have taken intermediate finance and accounting classes. I personally believe everyone should take the time to read an intro macroeconomics, finance, and accounting textbook before they start thinking about investments.

I just don’t like how finance classes, especially early ones pimp the efficient market hypothesis so much. It’s good to know the theory, but I feel like it has clouded my decision making a little.