The speaker estimates IBM's fair value at $248 versus a $160 market price, implying IBM is significantly undervalued; its price-to-forward multiple has fallen to 3.553 from more than five a few weeks ago and more than six a few months ago amid investor concerns, while a 20 to 30 basis point rate decline lowers the discount rate on future cash flows and supports valuation.

IBM stock is currently trading at a price-to-forward ratio of 3.553. Just a few weeks ago, it was trading at a price-to-forward multiple of more than five. A few months ago, the stock reached a high of more than six in price-to-forward sales.

Thus, the valuation has fallen significantly over the past few weeks as investor concerns have grown.

However, one of the factors that has worked in its favor recently is the decrease in interest rates by about 20 to 30 basis points. Since much of the free cash flow that these businesses will generate is concentrated several years in the future, this has a more significant impact on the fair value estimate I calculate.

Remember, to get a fair value for a stock, I estimate the amount of cash flow the business will generate from today and into the very long term. Then I discount those cash flows, because money in the future is worth less to us than the money in our pockets today.

There are also risks associated with it, and there is the time value of money. Interest rates are a key component of that discount rate. Since interest rates have fallen, this has had a positive effect on the valuation.

Overall, I calculated a fair value of $248, and the current market price of $160 indicates that the Nebeus Collection is significantly undervalued right now.