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Strategies & Market Trends : Value Investing

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To: bruwin who wrote (53406)2/13/2014 2:17:56 PM
From: JoJoK  Read Replies (1) of 78744
 
The accounting of assets isn't a reliable measure of value. If you think about it, the value of your assets is related to the owner's earnings that can be generated from the assets. As a business owner, the benefit you receive is the free cash flow of the business. If a stock is an equity stake in a business, then logically, the fair price for a stock is the present value of future cash flows, discounted at an appropriate rate. Value investing is about buying a stock at a discount to intrinsic value.
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