Stock Valuation Tools

Price is what you pay and value is what you get. Finding a well-run profitable business with good long-term prospect is not enough. You need to know how much you should be paying for it so you can be certain to make a profit from investing in the stock.

Shrew investors often make money on their investments at the point of buying and not at the point of selling. When you buy a stock at a good price with a reasonable margin of safety you know, with some certainty, that you will make a profit from that investment. There are many methods to value a stock but each method is either based on asset or income. Ultimately based on the company’s current performance or expected future performance.

Ultra successful long-term investor like Warren Buffett views stock as a business and values stock like a business owner. You can use the available suite of valuation tools to appraise stock like a business owner with an intention to hold it for a number of years.