Value Investing Bruce Greenwald Pdf

If no moat → value = asset value (liquidation or replacement). If moat exists → value = EPV + growth value (if any).

If a company is worth more than its net assets, the next step is to assess its Earnings Power Value. The EPV is calculated by taking the company’s sustainable, current earnings and capitalizing them by the cost of capital (EPV = adjusted earnings / cost of capital). This step asks a critical question: If the company has no future growth, is its current level of earnings enough to justify a price above asset value? This calculation provides a baseline for the company's value as a going concern. value investing bruce greenwald pdf

Land and buildings are adjusted upward if real estate values have appreciated. Specialized machinery is depreciated based on technological obsolescence. If no moat → value = asset value

In standard finance, growth is always viewed as a positive. Bruce Greenwald warns that The EPV is calculated by taking the company’s

Subtracting a realistic estimate of maintenance capital expenditure. 3. The Value of Growth