I recently wrote about reverse DCF and one concept I think deserves more attention: **base rates**.
Instead of only asking whether a company's growth story sounds plausible, base rates ask how often similar companies have actually achieved that level of growth historically.
That makes reverse DCF more useful: first identify what growth the current price requires, then compare it with company history and an external base rate.
Michael Mauboussin has done some great work on this idea, and I included it in the article because I think it's a concept many investors still underuse.
Full article: https://moateyscore.com/blog/reverse-dcf-implied-growth