So reading the intelligent investor. Chapter 8 is security analysis for the lay person.
Graham talks about common stock analysis and coming up with a valuation:
Valuation = estimated future earnings x capitalisation factor
And the capitalisation factor is meant to account for a whole range of things pertaining to the quality of the company eg long term prospects, management, capital structure, dividends. Uses a cap factor ~8-20
This seems soo inaccurate to pick a cap factor? Does anyone use this method to value a company?