While watching Wimbledon 2015, I take this opportunity to address another question. People asked that my valuation method can derive few possible fair values. How would I select the range? I have two methods:
- Reverse DCF and Reverse EY% – To assess the assumptions based on the current price.
- Visualization by using Football Field Chart – I will plot all fair values in the chart, and try to find the center of gravity (COG). Then, I will draw a rectangle using COG as middle. Width of the box is subjective, but I will try to find the width that make sense (at least visually).
So far, I never share Football Field Chart in my blog, because I do not use it frequently. I only use it when I have difficulty to find the proper range.
Football Field Chart is not something advance and new. Visualization can ease process of decision making.