Monday 27 November 2017

Intrinsic Value - A key to value investing




























































https://blog.elearnmarkets.com/how-to-calculate-intrinsic-value/








There is a bit of concern regarding the calculation of intrinsic value about its subjective nature despite the huge popularity. Different people come out with different intrinsic value for the same stock. Anyways the calculation of intrinsic value helps in determining the attractiveness of a stock.
Just like Warren Buffet said that he uses the following criteria to invest in stocks-
a. Business which he understands
b. Run by competent and able management.
c. With long-term focus
d. Attractively priced
He further adds
We usually can identify a small number of potential investments meeting requirements (1), (2) and (3), but (4) often prevents action.

However, many a time when a business passes all tests, it’s better to avoid the stock if the valuations are not attractive as compared to its intrinsic value.
Image result for buffett intrinsic value is the present value of all its future cash flows















Image result for buffett intrinsic value is the present value of all its future cash flows
Image result for buffett intrinsic value is the present value of all its future cash flows

Image result for buffett intrinsic value is the present value of all its future cash flows




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