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ValuFocus Investing: A Cash-Loving Contrarian Way to Invest in Stocks by William F. Mahoney, Rawley Thomas

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Chapter 18

ValuFocus—The Key Tool for Investing in Stocks

Note. LCRT is working with the brokerage industry to make ValuFocus available to investors. Please check our web site at www.ValuFocus.com for a list of available brokers or check with your broker to determine if it is offering ValuFocus. Access to ValuFocus also is available on our web site, www.ValuFocus.com.

Also, check with your local library. We want to encourage local libraries to carry both ValuFocus Investing and an on-line, scaled-down version of ValuFocus capability that you can play with.

The importance of ValuFocus: It simplifies the investing process. Complexity is what turns people off. We hide the complexity under the hood. In this volatile market, accurately valuing a company becomes the critical advantage.

Hopefully, by now, we have convinced you that the foundation of investing in stocks is an accurate estimation of the value of the business, namely, its intrinsic value.

We use a comprehensive process of determining a company's real intrinsic value as the basis for knowing if the equity market at present is over-, under-, or fairly pricing the stock. Knowing that the market migrates toward intrinsic value, we buy shares when they are being underpriced, sell any overpriced holdings, and make sure management is able to continue growing value when the stock is being priced fairly.

Importantly, we look for inflection points that will cause the market to recognize underpricing and start buying shares or overpricing ...

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