Stock Investor Pro Valuations: Estimating a Stock’s Fair Value As investors, we are trying to maximize our financial return when we buy assets such as stocks. Valuation is at the heart of investing.
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Stock Investor Pro Valuations: Estimating a Stock’s Fair Value As investors, we are trying to maximize our financial return when we buy assets such as stocks. Valuation is at the heart of investing. Perhaps the quickest way to fail as an investor is to consistently overpay for assets. Therefore, one way to succeed in investing is to buy stocks that are trading at an attractive price relative to their “intrinsic value” (more on that term in just a bit). Common sense dictates that investors should buy stocks when they are cheap and sell when they are rich. However, while this may be a simple principle, determining a company’s fair market price or intrinsic value is far from easy
