INTRINSIC VALUE
Investors should buy stocks as if they were groceries instead of perfume.
—BENJAMIN GRAHAM
When we buy groceries, clothing, or a television, we ask not only whether the food is tasty, the clothing attractive, and the television well built, but how much it costs. Is it worth the price? When we buy stock, we should ask the same question—not whether it is issued by a good company, but whether the price is right. Is it worth the cost? The relevant question is not whether Amazon is a better company than Target, but whether Amazon stock, at $800 a share, is a better buy than Target stock at $80 a share.
What is a share of stock worth? ...
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