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Future Value



December 27, 2006 – Comments (2)

The Future Value technique is one that I use when evaluating my real-life purchases. In short, you estimate earnings growth and the future P/E of a company, which then shows you what the stock would be priced at if it were to meet your estimates. It's a great way to see what a company needs to do to meet your wanted return-on-investment. Here's my detailed lesson on it:

The Future Value / Present Value calculator:

2 Comments – Post Your Own

#1) On January 05, 2007 at 12:38 PM, Michael2k (76.96) wrote:

Why doesn't your future value technique then work on Apple, who's growth is something like 50% year over year? AAPL, at this rate, should be worth $135 in five years... as long as they continue to develop better iPods, Macs, software, and keep prices competitive.

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#2) On January 09, 2007 at 9:38 PM, TMFPencils (99.84) wrote:

Hi Michael,

Let me just say it now: I probably made a mistake making an underperform call on Apple. I blew it. I didn't research them enough. For now, I'm waiting for a sell-off to end my pick, but that might turn out to be a mistake. At any rate, I've learned from it.

Thanks for your interest in my blog!

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