“..Value is what you get”. Just yesterday evening I’ve been asked a question that’s critical: “How do you know when is the moment to buy a stock?” It’s a very good question, let’s try to answer.
When you buy a business you want to assess a Value for this business. If someone shows you a property, a house for example, you naturally do the same thing. And then you look at the price, right? And immediately after that, you try to make a comparison with what you think is the “right price” that it means for you are looking for what we can generally call a “Value”.
If someone makes you a proposal to buy a Company you should do the same. You better ask yourself which is the Value of this business. With stocks this is particularly true because you are buying pieces of a business. You are going to pay a price for every piece of this business and this price can be different from what you really get. From their real value. The price is known. The Value has to be found…
(..to be continued..”)