The accuracy of the valuation depends on the accuracy of the company's cash flows**, and the accuracy of cash flows** depends on the stability of the company's operations, so conservative estimates of the future can only be based on the company's stable long-term historical operations.
The more conservative the value appraisal is, the more reliable the investment, and we will never be able to be accurate**. The exact timing and precise amount of a company's cash inflows and outflows, so we try to be conservative** while concentrating on those industries where unexpected events in our operations are unlikely to cause catastrophic panic for shareholders.
Pay particular attention to companies with accounting problems if a company is slow to include option costs as expenses or estimates of its pensions. If you are overly optimistic, beware of complex financial statement disclosures, which usually imply that management is not trustworthy, and if you simply don't understand the mistakes or management analysis, it usually indicates that management doesn't want you to understand it at all.
Be especially careful, companies that exaggerate their earnings** and grow together, they are rarely able to operate in a smooth sailing environment without any surprises, and it is difficult for them to grow their earnings steadily.