the only thing that was going for JB Hi-Fi was its discount to intrinsic value. Many investors believe that a stock I mention is below intrinsic value is a “darling’ of mine. It isn’t. A company must meet all of our criteria and it will only be held for as long as it does. Those of you using Skaffold will however have seen JBH was trading only at a discount to one of the intrinsic value estimates – the intrinsic value based on analyst forecasts – but not the more conservative Skaffold Line valuation estimate of $13.16. Both valuations are now likely to decline further in coming days -even the more conservative $13.16 valuation SKaffold has been displaying..So it seems that even those that have paid up and are using the Roger Montgomery SKaffold system would have been caught out - JB Hifi was trading at above SKaffold intrinsic values and SKaffold valuation is to be revised.
Not that there is anything particularly wrong with the Roger Montgomery SKaffold system, or any others for that matter - they have the potential to be useful in analysing the past. As for today and tomorrow, it is remains anyone's guess.
