“...pleasure and pain, they come and go and don't last... bear them patiently”—Gita
Figures come from 10-K and 10-Q filings, company releases and named market-data sources. When we can't verify a number, we leave it out or mark it unavailable.
We project a five-year value from analysts' consensus for the next two years and our stated best-estimate assumptions after that: growth (or, for cyclical businesses, a mid-cycle level of earnings) and an exit multiple. The bear and bull cases are the low and high ends of those assumptions, and the base case is the midpoint. Today's price enters only afterwards, as the implied annual return, so the value does not move with the share price. These are educational illustrations, not recommendations.
Accounting quality, governance, cash conversion, dilution and concentration get as much space as growth. Each note says plainly what could go wrong.
Every five-year projection carries an Evidence grade. It tells you how much of the value rests on figures that can be checked (reported results and published analyst consensus, with the number of analysts and the spread of their estimates) and how much rests on our own assumptions (growth after the consensus years, mid-cycle earnings, exit multiples). It is not a rating of the company or of the investment.
| Grade | What it means |
|---|---|
| Strong | Broad, tight consensus backed by reported results and contracted revenue; the main judgement is the exit multiple. |
| Moderate–strong | Good consensus and business evidence, with one material assumption (for example a step-up in a single year, or few analysts on a key year). |
| Moderate | Consensus is solid for the next two years, but the later years depend on an unproven driver or a wide estimate range. |
| Weak–moderate | Consensus exists but is wide or cyclical, and much of the value comes from our normalisation or multiple assumptions. |
| Weak | The value rests mostly on our assumptions: earnings are near zero or at an unprecedented peak, or much of the portfolio cannot be valued on earnings. |
Grades are reviewed with the assumptions about once a year, or sooner when a company's evidence changes. Quotations from management appear in our notes only when we have checked them against the company's own release or filing. Educational, not advice.