Quotes on Valuation

Your wealth is in many ways dependent on what other people will pay for your assets.

A cheap stock can stay cheap forever, but if you own a bankrupt bond, the process of emerging from bankruptcy and distributing new securities offers a practical catalyst to realize the value.

When the markets are fairly ebullient, investors tend to hold the least objectionable securities rather than the truly significant bargains.

Investors must never mistake an investment that is down in price for one that is bargain-priced; undervaluation is determined only by a security's price compared to its underlying value.

We consider for each of our investments not only whether a security is undervalued but why it is undervalued. If the reason is that there are uninformed or emotional sellers, we become more comfortable.

The main underlying principle of value investing is that you should invest in undervalued securities because they alone offer a margin of safety.

Value to some extent is in the eye of the beholder. It is very hard to pin down what the value of a future set of cash flows from a business, be it cable TV or biotechnology, is going to be.

Mutual fund managers, desperate to put cash to work don't buy what is cheap but what is working since what is cheap by definition hasn't been working.

You can’t forecast multiples.

Stocks often sell at ridiculously low levels for considerable periods merely because few people know anything about them.

People say the market is overvalued, but if you are only looking at certain names, you will always find times when those names are undervalued. That's what we're waiting for.

In point of fact, all sorts of considerations enter into the market valuation which are in no way relevant to the prospective yield.

If you can invest your money under fair conditions, in fact under attractive specific conditions, I think one certainly should do so even if the market should go down further and even if the securities you buy may also go down after you buy them.

The successful purchase of growth stocks requires two rather obvious conditions: First, that their prospect of growth be realized; and, second, that the market has not already pretty well discounted these growth prospects.

Speculative operations are all concerned with changes in price. In some cases the emphasis is on price changes alone, and in other cases the emphasis is on changes in value which are expected to give rise to changes in price.

Those with enterprise haven't the money, and those with money haven't the enterprise, to buy stocks when they are cheap.

The true measure of common stocks values, of course, is not found by reference to price movements alone, but by price in relation to earnings, dividends, future prospects and, to a small extent, asset values.

To my mind, the so-called growth-stock investor -- or the average security analyst for that matter -- has no idea of how much to pay for a growth stock, how many stocks to buy to obtain the desired return, or how their prices will behave.

The only thing you can be sure of is that there are times when large numbers of stocks are priced too high and other times when they're priced too low.

The value approach has been founded on the premise that in many -- but by no means in all -- cases a dependable range of valuation can be established for a common stock by analytical techniques; that often this range differs substantially from the current price; and that such differences offer rewarding opportunities for investment operations.

I insist that more damage has been done to stock values and to the future of equities from inside Wall Street than from outside Wall Street.

All my experience goes to show that most investment advisers take their opinions and measures of stock values from stock prices. In the stock market, value standards do not determine prices; prices determine value standards.

The true measure of common stock values, of course, is not found by reference to price movements alone, but by price in relation to earnings, dividends, future prospects and, to a small extent, asset values.

Experience shows that when really cheap issues are scarce the general market is high; but we do not present this as an infallible principle.

It is a great mistake to refine the analysis of a single year's showing to the last possible penny, in order to build from that some substantial idea of the value of the stock; because it cannot be found in the results for any given year no matter how accurately those results were stated.

The security analyst can only give you certain hints as to what the solution is likely to be, certain indications of a range of value rather than a specific figure, and perhaps a diffident suggestion as to where within this range he believes the probabilities of the future will lie.