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Analysis article·🤖 📝 DeepSeek and Trump’s EOs: The Winners And Losers
Hi Mgino, The bull thesis is facing a few risks - but there are a few reasons to treat reports like this with a pinch of salt. I havn’t seen the original note from GS, but the Bloomberg articles refer to selling more than to short selling. The other outlets seem to be taking the Bloomberg article and adding sensationalist spin to it. HFs were net sellers In January, but that selling could be any combination of -profit taking after the post election rally -reducing leverage on long positions -long/short funds returning to a neutral or short bias -outright short trades. So hedge funds may indeed be selling, but that doesn’t necessarily mean they all believe the market is headed for a ‘precipitous crash.’
Analysis article·7 Investing Lessons From 2024
Fair value, or intrinsic value, is the present value of future cash flows. To get to the present value, future cash flows are discounted at a discount rate which is the opportunity cost + a risk premium. Fair value is the amount you believe you could pay and still earn that discount rate. The model Simply Wall St uses to estimate fair value varies depending on the type of company and growth stage. You can view the specific model and a detailed calculation by clicking on ‘Data’ below the fair value estimate. Any fair value calculation is still an estimate and relies on several assumptions. These include analyst estimates for earnings or cash flows, the point at which growth is likely to slow down, a perpetual growth rate, and a discount rate. These estimates must be conservative when looking 10 to 20 years into the future. That’s probably why the fair value estimates seem low compared to price targets. However, if you can invest in a company trading below a conservative fair value estimate, you’ll hopefully have less downside risk, and more upside potential. And lastly, to answer your first question, Simply Wall St’s data comes from CapIQ which is part of S&P Global, one of the largest and most reliable market data providers. The range of price targets on the company report for Eaton Corp is very similar to the range you mentioned from the other sites. Hope that helps - but let us know if you need more explanation. regards Richard