mjs111

Yep. TJX is another great business that I don't own but would be interested in buying if it gets a little bit cheaper. Mike

I would agree with all your points, Crip. I'm a fan as a customer with my Costco Executive membership card and Costco Visa, and it's a fantastic business. I've started regularly checking Costco's price at this point. I'd really like to get it a little cheaper. Mike

Costco still looks a little expensive. I was ballparking fair value at around $135-ish. My main valuation inputs were 6-7% revenue growth, 3.2% operating margins gradually climbing a bit to 3.4% over time, a 32% long term tax rate (maybe too high if tax reform comes), and discounting at 9.5%. Lowering the discount rate to 9% raise the valuation estimate to around $147. Mike

I'd also recommend Aswath Damodaran's books, specifically: Investment Valuation https://www.amazon.com/Investment-Valuation-Tools-Techniques-Determining/dp/111801152X/ref=sr_1_7?ie=UTF8&qid=1499695675&sr=8-7&keywords=aswath+damodaran Corporate Finance https://www.amazon.com/Corporate-Finance-Practice-Aswath-Damodaran/dp/0471283320/ref=sr_1_10?ie=UTF8&qid=1499695675&sr=8-10&keywords=aswath+damodaran There's some repeat in the books. If you do just one do the first one. These are thick, several hundred page textbooks, with exercises at the end of each chapter. They're essentially the books Damodaran uses to teach his classes. Damodaran will take you through the theory of various valuation techniques and explain everything thoroughly. As a bonus you get Excel spreadsheet examples from which you can start making your own valuation spreadsheets. Like another poster said, you'll need to take Damodaran with a pinch of salt. Damodaran does hue to the academic side, so you'll see discount rates calculated to the second decimal point, etc.. That said, he's a great teacher. Mike