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Strategies & Market Trends : Value Investing
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To: bruwin who wrote (62752)10/31/2019 2:04:38 PM
From: Nya_Quy  Read Replies (1) of 78751
 
And EV is supposed to represent what a buyer should be paying for a company. But that could be a certain value, THIS WEEK, but, say, 2 or 3 weeks later, because of its Price VARYING, it could be a very different number ..... I don't see the point.

EV is supposed to represent an approximation of the price paid to own all the productive assets of the company. Price =/= value, hence today's EV could very well diverge from what an private investor would want to pay if the company would not have been public.

And EV is supposed to represent what a buyer should be paying for a company.

EV does not tell me what a buyer SHOULD (= advice by Mr. Market) pay for a company today, but what it HAS (= the offer of Mr. Market) to pay for it today. Fluctuations in the EV is what makes it possible for astute investors to buy at discounts.

Nya
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