Amanda Stanhaus

Tag: value

Efficient Market Theory

Value is perfectly reflected in the stock price. Therefore, take a random walk and enjoy the ride. This what Warren Buffett has disproven.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Face value

The price on the shoe box. The dollar amount on a security’s certificate.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Fundamental Analysis

Evaluate the value of a security. Used by value investors (i.e. Warren) to decide if there is a difference between the price and value of a stock. If price<value, buy and I could make lots of money.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Investor

Looking for a good deal. Not a steal. Opposite of speculator.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Net Asset Value

(NAV)=(Total Assets minus Liabilities)  divided by # of shares.

Shares of a mutual fund are sold at this #.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Present Value

The value of money in the future discounted to today. I know I will wear those fabulous shoes one day to a black tie. How long in the future? Discount the price by the interest rate and the length of time from the present and I will find the present value.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

How does Mr. Buffett Consistently Pick Winners??

“To invest successfully over a lifetime…what’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.”

Warren Buffett,  Preface to The Intelligent Investor.

(click on the bold-faced vocab words:))

Warren’s favorite framework is value investing. Benjamin Graham wrote the definitive book, The Intelligent Investor.

Here are the book’s highlights:

Speculators and Investors are NOT the same!

“The speculator’s primary interest lies in anticipating and profiting from market fluctuations. The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices.”

Diversification and Margin of Safety are best friends. Both make investing comfy.

Diversification is an established tenet of conservative investment. By accepting it so universally, investors are really demonstrating their acceptance of the margin-of-safety principle, to which diversification is the companion…And a  true margin of safety is one that can be demonstrated by figures, by persuasive reasoning, and by reference to a body of actual experience.”

Buy at the right price (time) will cause you to laugh (cry) to the bank.

Regardless of market swings, the way to profit from pricing is, “to buy stocks when they are quoted below their fair value and to sell them when they rise above such value.”

Want the most money? Be Brilliant.

“The maximum return would be realized by the alert and enterprising investor who exercises maximum intelligence and skill.”

Interest piqued?  Here is the copy I read.
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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Value

I’m important to him. He values our relationship.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Value Fund

mutual fund made of value stocks.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Value Investing

This is an inefficient market. This company’s stock is worth much more than it’s current stock price. Buy!! Quality, ladies!

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)