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Are Valuation Models we learnt applicable in Practical world?

Created by : Parthiv Dave, Business Analyst, Tata Consultancy Services  | 06 17 2011 17:23:18 +0000
Industry : Equity Research/AnalyticsFunctional Area : Valuation(Corporate Finance)
Keywords : are valuation models we learnt applicable in practical world?
Activity:  292 views;  last activity : 06 18 2011 17:46:21 +0000
 
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Yes, it's useful but only an indication Vs Many parameters impact and a unified model cannot be designed
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I think valuation models are useful for making comparative studies between stocks and for getting an close idea but after entrance of FII's market is under more control of them rather then our models...
By Ashish Sureka, Assistant manager - Mergers & Acquisitions / Corporate Affairs, Ruia Group  | 06 18 2011 17:46:21 +0000
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I would say yes...but a proper consensus valuation model is rather more useful in tracking a particular stock than a single valuation model. Indian Analyst are mostly use DCF valution method but if we see abroad like the U.S analyst they prefer relative valution techiques and they are more focused on the consensus modelling valuation which i feel is a better option than to concentrate on a single valuation technique.
By Pranesh Khale, Analyst, Insync Analytics  | 06 18 2011 05:39:12 +0000
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Well, the models that we learn are all kind of academic, created and tested under ideal or best conditions. That is not the case with real world where we face the worst cases/conditions most of the time and hence these models tend to deviate or fail. So, yes, they are only an indication but still useful.
By John Jacob, Consultant, confidential  | 06 17 2011 18:19:39 +0000
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Are Valuation Models we learnt applicable in Practical world?
By Parthiv Dave, Business Analyst, Tata Consultancy Services  | 06 17 2011 17:23:18 +0000
Argue for "Yes, it's useful but only an indication"
Argue for "Many parameters impact and a unified model cannot be designed"
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