Fair value is just a way out to guide only.

It is just like beauty contest, who is more beautiful than others.
How to judge? I also don't know.

Put the same model/listed company, different people can come out with different figure and result.

Economy, businesses can be changing rapidly.
Today the company can report making 1 billion profit, cashflow + 1 billion, analysts said fair value Rm10
Next quarter, business down, company making 1 million, cashflow +0, analysts may say fair value Rm5.

Worst one,
Company report receivables being classified defaulted after, resulted loss a billlion, then analysts may downgrade the fair value to Rm1.

So how?
Hey last time the analysts said Rm10 is fair value one, how come now Rm1.

The world is never fair.

For me, the "fair value" is the value/price you paid to buy the stocks is worth to generate satisfactory profit for you.

Actually it is about individual perception or individual figure instead of a universal figure to start with.

To invest in stock, one should never look what is fair value, or TP set by anyone.
The first criteria is to judge yourself,
How much I should pay for such amount of profit can be generated.
How will the company grow, company prospect, future will be in term of generating growth in profit.
How well the company management is taking good care on shareholders and sincere and honest in running the businesses.

Just my 2 cents.

This post has been edited by cherroy: Nov 6 2010, 11:02 AM