Two Ways To Find An Undervalued Stock

The word “undervalued” is one of the most commonly used, yet often undefined, words in investment discussions. The general principle of searching for undervalued stocks is straightforward enough: People that buy undervalued stocks want to find a company that is worth more than the current price of the stock indicates. But the tactics for making this identification differ among the thousands of men and women that dedicate sizable chunks of their life energy to this pursuit.

Charlie Munger said that we all have an obligation to destroy at least one deeply held conviction per year. When I first started studying large-cap stocks, I believed that a stock was undervalued if it traded at … Read the rest of this article!