The Third Pig

Tenets of Value Investors

Posted by Ben Taylor on January 11, 2008 11:23 AM

A Penny SavedValue investors make a habit of relating price to value. They recognize that stock markets rise and fall. The prices of individual stocks likewise swing widely. The intrinsic value of a company lies somewhere in between. There are stocks priced about what the underlying business is really worth and stocks priced below that.

Value investors do not guess when the market or a stock is at its peak, trough, or specific points in between. There will nearly always be times when some positions are priced attractively compared to value and others when the opposite is the case. This requires business, accounting and valuation principles.

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