Warren Buffett has always said the foundation of a sound investment is to have a so-called margin of safety. What does that mean exactly? "We insist on a margin of safety in our purchase price," Buffett said in his annual letter to shareholders as long ago as 1992. "If we calculate the value of a common stock to be only slightly higher than its price, we're not interested in buying.
The calculation So how low of a price in relation to a stock's intrinsic value is low enough to guarantee sufficient margin of safety? Buffett said he learned from Graham a very simple formula, which is to figure out a company's net working capital and try to buy it at a third of that. A company's working capital is calculated by subtracting its current liabilities from its current assets. However, this formula has its limits when applied to the current stock market environment.
Deutschland Neuesten Nachrichten, Deutschland Schlagzeilen
Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.
Herkunft: Crypto_Potato - 🏆 568. / 51 Weiterlesen »