Intrinsic Value

  • 25 Oct
    How To Calculate Intrinsic Value & Why You Need To

    How To Calculate Intrinsic Value & Why You Need To

    • Calculating the intrinsic value of a stock is essential for making any kind of buy or sell decision.
    • However, intrinsic value is different for everyone and depends on what you expect from the market.
    • Attaching a margin of safety to intrinsic value is all you need for low risk high return investments.



    Introduction

    99% of the what’s discussed about stocks is whether a stock is undervalued or overvalued and where will it go as you wouldn’t be a proper analyst without a price target on every stock you discuss.

    This is completely the wrong way to approach investing, but we as analysts will continue to deliver what the market wants. More →

  • 24 Mar
    Using Intrinsic Value To Measure Portfolio Performance

    Using Intrinsic Value To Measure Portfolio Performance

    • The market is irrational and can’t be used as the only measure of investment performance.
    • Imagine if all the businesses you own suddenly delisted, you’d look at their value in a different way.
    • Intrinsic value is based on the business owner perspective which is essential for reaching healthy long term returns.

    Introduction

    This past Tuesday was a bad day for stocks with both the Dow and the S&P 500 falling more than 1%. This isn’t very significant for now, apart from the fact that it broke the longest run the S&P 500 has ever seen without a 1% decline (64 days in comparison to 34 days in August 1995). However, it’s an excellent introduction to today’s topic on how we measure investment performance. More →