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Also, as for the discount rate, some may say 10% is too low. Here again, this is your call. I tend to use 10% but then I also have a rule not to buy companies unless their PIV is 50%-65%. So my margin of safety, or at least one of my margins of safety, is the low PIV requirement

Hewitt,

One of the comments I made about PIV-ER on another board (BWLD, I believe) was that the somewhat low discount rate is offset by several other checks againts being overly optimistic, namely the conservative growth in outlying years, the use of growth rates that are 75% and 50% of forecasted growth, and the overweighting of those less aggressive forecasts. I think there's plenty of safety built in.

Thanks again,

Paul

P.S. By the way, I just realized your book is sitting on my desk right now - I was looking at the section on evaluating management just the other day as part of another discussion. Another helpful contribution to my investing journey.
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