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Buffet has said that he can calculate intrinsic value (IV) in less than 5 seconds, how does he do that?

According to this article...

http://www.wikiwealth.com/dictionary:warren-buffett-intrinsic-valuation

...A simple formula is free cash flow / risk-free rate.

Eg. For REA in 2014 cash flow per share is 139.4 cps and capital expenditure per share is 19.9 cps, so free cash flow per share is 139.4 - 19.9 = 119.5 cps, or $1.195 per share.

If the risk-free rate is the 10 year Australain government bond yield of 3.32%, IV = 1.195 / 3.32% = $35.99.

With the REA share price currently being $47.95.

Any thoughts on using this approach for IV calculation given it's simplicity and requiring less assumptions than DCF calculations?

Perhaps more accurate for companies with more stable and less volatile free cash flow from year to year?

For some stocks using this approach I get IV figures that seem far detached from reality!

Thanks.