Amit Kumar Singh
January 11, 2011 6:41 pm
Is it value investing in stocks with its book value close to or greater than its current market price ? ( obviously if, fundamental of company is good )
It is a complicated procedure with lot of assumptions and really a specialist’s job.
Surely, it is not simply a matter of looking at the book value, the share price and declare wow, that share is trading at a discount from its book value and hence it is a sure buy!!
How can we calculate the intrinsic value of a stock? Please share your knowledge with one example.
How can we calculate the intrinsic value of a share? Please share your knowledge with one example.
Book value is a complicated and sometimes quite erroneous value. Same with P/E.
Known factors including book value, earnings, etc are already factored in the price of a stock.
Value-investing = investing in companies which are trading at a price which is quite less (=margin of safety) than the Intrinsic Value.
This intrinsic value is not equal to the book value!! Though, book value is a part of the intrinsic value.
Hope this explains.
Your email address will not be published. Required fields are marked *
Please subscribe me to your Email Newsletters
This site uses Akismet to reduce spam. Learn how your comment data is processed.
Download Our FREE Ebook!
Available only for first 100 people today
New here? Create an account