Understanding Market Prices

Value investing works if stock prices fluctuate around business value. Only then can stocks be bought at discounts to business value (or sold at premiums to business value).Value investors believe that markets price stocks in ways that produce such gaps.

Numerous complex factors influence stock market prices. Graham identified two categories of factors: speculative and investment.

1. Stock Market Prices
2. Market metrics P/E and Intrinsic value
3. Rational Thinking about Irrational Pricing
4. The Anxiety of Selling
5. Control Value of Majority Interest