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1:06 am
January 6, 2012
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Jae Jun
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yes EPV requires you to make assumptions about the business instead of growth though.
But that too is very subjective..
Just cant get away from making assumptions with valuation. After all, we are trying to predict the future.
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11:48 am
January 4, 2012
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Carlh868
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I decided to give this book a try during the Chrismas break and if you think DCF valuation requires too many assumptions. Well, guess what, EPV valuation also requires a lot of assumptions from the person who is doing the valuation. I do get the principles of EPV, but at this point, I am just not comfortable and comfident with the EPV approach. 
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10:07 pm
March 10, 2011
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Jae Jun
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I haven't read it (plan to) but I think if that reviewer had read Bruce Greenwald's "Value Investing" he would understand.
For EPV to work, you have to go through the asset reproduction method first. That is where I believe those assumptions are coming from.
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12:00 am
March 10, 2011
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Carlh868
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"This book is about value investing from a Graham/Dodd perspective. The
first few chapters provide valuation examples for Sears, GEICO and Gen
Re. These chapters illustrate a fundamental weakness of the book and
the methodology. Each of the valuations rely upon a number of
subjective guesses. Unfortunately there is no consistency or explained
logic behind these subjective guesses. For example in valuing GEICO,
the author assigns intangible value at 50% of acquisition costs. For
the valuation of Gen Re, another insurance company, the author assigns
intangibles at 300% of acquisition costs, six times the multiple used in
the GEICO valuation! In each of the valuations the author derives a
price that is remarkably similar to the actual acquisition price and as a
reader I get the overwhelming sense that the author has simply played
around and "fudged" his subjective guesses until his estimations have
matched the actual acquisition price. Even if there was a sound
framework it is of little help to the reader since it is not clearly
explained."
The above is from a review at Amazon about this book and I would like to hear some feedback from people who had read this book. At this time I will put this book on hold even though it has a 4 and half stars rating from Amazon. Thanks 
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10:11 am
December 2, 2010
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valueinvestortoday
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I read some of his work last night. Very good stuff. I'll be ordering his book today.
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11:00 pm
December 1, 2010
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Jae Jun
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Yes the book does use the same EPV that Greenwald uses. But Applied value investing has more examples to work through so it definitely is a good one to read.
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4:25 pm
December 1, 2010
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valueinvestortoday
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"However, he also uses what he calls a "Earnings Power Value" as his second valuation (similar to EPV)"
It's most likely EXACTLY like Greenwalds EPV, which is the acronym for "Earnings Power Value". Greenwalds's EPV actually isn't "Greenwald's". It's the exact same formula created by Ben Graham only re-written in reverse order. There isn't multiple definitions for Earnings Power Value therefore it must be the same otherwise it would need to be called something else; in the same respect that Net Income can only mean Net Income or Revenue can only mean Revenue.
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3:11 am
January 10, 2010
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Jae Jun
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I haven't read this book. I'll look into purchasing it if it contains good valuation models. Building a list of books to buy to save shipping.
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7:20 pm
January 7, 2010
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dmop12
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Just read Joseph Calandro's book. I don't know if you read it but it had some great value examples. He valued Buffets purchase of Geico and GenRE. He also valued Lampert's acquitision of Sears. It also includes a valuation of Delta Apparal Inc. He uses NAV as you use in your sheet with some minor changes. However, he also uses what he calls a "Earnings Power Value" as his second valuation (similar to EPV) and thirdly a Growth model as his third valuation. I think this book possibly has one of the best practical application examples that I have read yet. Would like to hear anyones thoughts on it. I recommend this book to all value investors.
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