The Tricks And Techniques You Need To Value Stocks

about 2 years ago12 mins

The Tricks And Techniques You Need To Value Stocks

The Price Isn’t Right

Here’s a brainteaser to kick things off: if a stock is trading at $100, how much is it worth?

You might answer $100, on the grounds that a stock’s value is whatever people are willing to pay for it. And you wouldn’t be alone. According to the popular “efficient-market hypothesis”, the price people pay for a share of a company takes into account all available information about that company – both what’s happened in the past and what’s likely to happen in the future.

But not everyone agrees. Here’s what Warren Buffett had to say about things:

QUOTE: “When the price of a stock can be influenced by a ‘herd’ on Wall Street with prices set at the margin by the most emotional person, or the greediest

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