📖Benjamin Graham
Intrinsic Value Model
Intrinsic value exists independently of market price.
The intrinsic value of a stock is the value justified by the facts — the assets, earnings, dividends, and definite prospects. This value is independent of the market price.
🏠 Everyday Analogy
📖 Core Interpretation
In Intrinsic Value Model, Benjamin Graham focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：Separating value from price is the foundation of intelligent investing.
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❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
Dot-Com Bubble Euphoria (1999)
Tech stocks soared despite weak earnings. Many investors extrapolated recent gains, assuming the trend would persist indefinitely.
✨ Outcome：Disciplined investors following Graham’s value principles avoided overpriced tech stocks and preserved capital when the bubble burst in 2000-2002.
2
Post-Crisis Market Rally (2009)
After the 2008 crash, pessimism dominated headlines and forecasts. Many predicted a prolonged depression and stayed in cash.
✨ Outcome：Value investors who bought strong businesses at deep discounts in 2009 saw substantial gains as markets recovered over the following years.
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