Not exact matches
The key is to make
conservative,
reasonable assumptions and adjust them when they prove wrong.
He also takes a
conservative approach to how much money one needs in retirement, using a 4 % withdrawal
assumption, which in a low interest - rate and mid-to-high P / E environment like today is only
reasonable.
However, given that I'm looking at a 40 year horizon, I feel 4 % is a
reasonable /
conservative long term
assumption.
Which all equates to $ 9.74 per share — but I'm surely
conservative in my
assumptions, so stretching my valuation to the $ 11 bid appears fairly
reasonable.
That said, I think a $ 300K exit is
reasonable, though I like to be
conservative, so I prefer to use $ 275K for my
assumptions and analysis.
Furthermore, if household formation is 1 million in 2013 along with 300,000 demolished / uninhabitable units and 100,000 in new demand for vacation homes this year — a
reasonable and
conservative assumption — then it will take 1.4 million housing starts just to meet the new demand this year without solving the previously accumulated shortage.