Money and Finance
- Seth Klarman Quote
From Margin of Safety(Source):Many investors insist on affixing exact values to their investments, seeking precision in an imprecise world, but business value cannot be precisely determined. Reported book value, earnings, and cash flow are, after...
- Benjamin Graham: Figuring It Out (book Review)
BEFORE Benjamin Graham started to work on Wall Street, investment analysis was a hit-and-miss affair, focusing more on recent price movements than on the merits of individual companies. Graham, a brilliant mathematician, took the process to a much higher...
- Mcgraw-hill Professional To Publish 75th Anniversary Edition Of Graham And Dodd's Security Analysis
Benjamin Graham and David L. Dodd's Security Analysis, first published by McGraw-Hill nearly 75 years ago, forever changed the theory and practice of successful investing. Written in the midst of the Great Depression and in the wake of the 1929 stock...
- The Effect Of Discount Rates On Intrinsic Value
The discount rate you use in a discounted cash flow valuation can have a big effect on an intrinsic value calculation. To illustrate, let's use an example based on the following assumptions:-Earnings Per Share Year 0: $1.00Growth Years 1-5: 12%Growth...
- The Effect That Buying With A Margin Of Safety Has On Your Returns
A little math for a Monday morning: Buy a stock at 50 percent (1/2) of intrinsic value, sell at 90 percent of initial intrinsic value: IRR if it takes 2 years: 34.16% IRR if it takes 3 years: 21.64% Buy a stock at 67 percent (2/3) of intrinsic value,...
Money and Finance
Graham and Dodd quote (example of the range in estimating intrinsic value)
From Security Analysis, 1940 edition:
“This should indicate how flexible is the concept of intrinsic value as applied to security analysis. Our notion of the intrinsic value may be more or less distinct, depending on the particular case. The degree of indistinctness may be expressed by a very hypothetical “range of approximate value,” which would grow wider as the uncertainty of the picture increased, e.g., $20 to $40 for Wright Aeronautical in 1922 as against $30 to $130 for Case in 1933. It would follow that even a very indefinite idea of the intrinsic value may still justify a conclusion if the current price falls far outside either the maximum or minimum appraisal.”
- Seth Klarman Quote
From Margin of Safety(Source):Many investors insist on affixing exact values to their investments, seeking precision in an imprecise world, but business value cannot be precisely determined. Reported book value, earnings, and cash flow are, after...
- Benjamin Graham: Figuring It Out (book Review)
BEFORE Benjamin Graham started to work on Wall Street, investment analysis was a hit-and-miss affair, focusing more on recent price movements than on the merits of individual companies. Graham, a brilliant mathematician, took the process to a much higher...
- Mcgraw-hill Professional To Publish 75th Anniversary Edition Of Graham And Dodd's Security Analysis
Benjamin Graham and David L. Dodd's Security Analysis, first published by McGraw-Hill nearly 75 years ago, forever changed the theory and practice of successful investing. Written in the midst of the Great Depression and in the wake of the 1929 stock...
- The Effect Of Discount Rates On Intrinsic Value
The discount rate you use in a discounted cash flow valuation can have a big effect on an intrinsic value calculation. To illustrate, let's use an example based on the following assumptions:-Earnings Per Share Year 0: $1.00Growth Years 1-5: 12%Growth...
- The Effect That Buying With A Margin Of Safety Has On Your Returns
A little math for a Monday morning: Buy a stock at 50 percent (1/2) of intrinsic value, sell at 90 percent of initial intrinsic value: IRR if it takes 2 years: 34.16% IRR if it takes 3 years: 21.64% Buy a stock at 67 percent (2/3) of intrinsic value,...