Not sure what you're getting at there Stoney - are you...

Not sure what you're getting at there Stoney - are you suggesting you go with your 'gut feel' as to a company's valuation and completely ignore any quantitative analysis?

You ask "Well how about your own knowledge of the company, the industry its involved in and your opinion on its growth prospects?", and yes I agree, you need to take all of those things into account before you even bother to make a valuation. Why bother trying to value something if it isn't worth buying anyway?

As Niels Bohr once said, "Prediction is very difficult, especially about the future". No analyst is likely to get it exactly right with any consistency (neither am I and neither are you), there are just too many variables. However, if you are aware of the limitations of analyst's consensus, I believe that it is perfectly reasonable to use this as a 'best case' scenario to perform a quantitative valuation and discount it based on your own research.

If you are investing for the long term you would be looking to buy at a healthy discount to what you reckon it is worth anyway - Ben Graham's famous margin of safety.

Anyway, each to their own, no one has a perfect system. Some people reckon they make money using a dart board approach to share selection. Good on 'em.