What Is a Stock Worth? (Intrinsic Value)
Estimating a business’s true value so you know whether the price is a bargain.
Lessons
- Price Is What You Pay, Value Is What You GetThe most important distinction in investing — and where all your edge comes from.
- Time Value of MoneyA rupee today beats a rupee next year. The idea every valuation is built on.
- Discounting: Future Cash to Today’s ValueHow to translate cash a business will earn for years into a single number you can compare to price.
- A Discounted Cash Flow, Step by StepBuild a simple DCF from scratch and watch how each assumption swings the answer.
- Margin of SafetyBuy well below your estimate of value so being a little wrong does not cost you.
- Valuation Is a Range, Not a NumberAnyone quoting one exact fair value is fooling themselves. Think in scenarios.