Talisman Finance uses and in house proprietary economic model to determine the fair value of a company. It’s what powers Talisman Finance investment advisors – and distinguishes our investment approach – helping generate superior returns, year after year, with limited risk.

The way the model works by analyzing the financial structure – defined by the balance sheet, earnings and market value – of a company. Unique to the model is the calculation of an amount of money the balance should be earning given its financial organization – what we call theoretical or benchmark earnings for the balance sheet. By comparing what a company is projected to earn against what it “should” be earning (benchmark earnings) reveals how efficient that balance sheet is in generating earnings and, by extension, how it should be valued.

Using data from our economic model, we further refine our analysis by using statistical methods to compare all stocks against each other in order to derive a Model Price for each company.