# BurryDCF - Dilution-Aware Stock Valuation Calculator

> BurryDCF is a free online tool that calculates stock fair values using Michael Burry's dilution-aware valuation methodology. It compares Traditional Gordon Growth Model (GGM) with Burry's Owner's Earnings approach that accounts for stock-based compensation (SBC) dilution. The tool reveals the "valuation haircut" - how much SBC dilution reduces a stock's true fair value.

## Why This Matters

Wall Street adds back Stock-Based Compensation as a "non-cash" expense, inflating reported earnings. Michael Burry's methodology calculates TRUE Owner's Earnings by accounting for the actual cash spent to offset dilution:

**Owner's Earnings = Net Income + GAAP SBC - Actual Buybacks - RSU Tax Withholdings**

For example, NVIDIA's Wall Street "adjusted" earnings were $226B, but TRUE Owner's Earnings were only $114B - a 50% difference!

## Key Features

- Calculates "valuation haircut" showing how much SBC dilution reduces fair value
- Uses SEC EDGAR XBRL data for Owner's Earnings components
- CAPM-based discount rate with real-time 10-Year Treasury rates from FRED
- Full data provenance showing exact SEC XBRL field names used
- Stock split detection for accurate dilution rate calculation
- Earnings-aware caching that refreshes after quarterly reports

## Formulas

**Traditional Gordon Growth Model:**
PV = CF₁ / (d - g)

**Burry Dilution-Aware Model:**
PV = CF₁ / [(1+d)(1+y) - (1+g)]

Where:
- CF₁ = Next year's Owner's Earnings per share
- d = Discount rate (from CAPM)
- g = Growth rate (Owner's Earnings CAGR)
- y = Dilution rate (share count CAGR, negative = buybacks)

## Documentation

- [Methodology](https://burrydcf.com/methodology): Complete explanation of GGM vs Burry dilution-aware model with mathematical derivations
- [CAPM Explained](https://burrydcf.com/blog/capm-explained): Understanding how discount rates are calculated using the Capital Asset Pricing Model
- [Owner's Earnings Guide](https://burrydcf.com/blog/owners-earnings): Michael Burry's true cash flow calculation methodology
- [Burry DCF Guide](https://burrydcf.com/blog/burry-dcf-guide): Step-by-step guide to dilution-aware valuation

## Educational Resources

- [FAQ](https://burrydcf.com/faq): 15 common questions about dilution-aware valuation, stock-based compensation, and fair value calculation
- [Glossary](https://burrydcf.com/glossary): 24 financial term definitions including Owner's Earnings, Valuation Haircut, CAPM, Beta, and more

## Data Sources

- **SEC EDGAR**: Net Income, Stock-Based Compensation, Stock Buybacks, RSU Tax Withholdings (via XBRL API)
- **Polygon.io**: Real-time stock prices, dividends, shares outstanding, company fundamentals
- **FRED**: 10-Year Treasury Constant Maturity Rate (DGS10) for risk-free rate

## Example Use Cases

1. **Value Investor Analysis**: Calculate fair value for NVDA, AAPL, MSFT accounting for their significant SBC programs
2. **Earnings Quality Assessment**: Compare Wall Street earnings vs TRUE Owner's Earnings
3. **Dilution Impact**: See how 3-5% annual dilution compounds to reduce fair value by 15-30%

## Optional

- [About](https://burrydcf.com/about): Background on the project and why dilution-aware valuation matters
- [Calculator](https://burrydcf.com/): The main valuation calculator tool