📖William Gann

Focus on Intrinsic Value

🌿 Intermediate★★★★★

Compare price to intrinsic value, not to past prices. Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong. Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside. In Focus on Intrinsic Value, W.D. Gann focuses on the gap between price and value. Key insight: The price-value gap is the source of returns. Valuation is like buying a house: the asking price reflects mood, but true value comes from structure, location, and long-term utility.

Avoid misuse: Confusing a low price with true cheapness

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Always estimate the intrinsic value of a business before investing. Compare price to value, not price to past price. The gap between price and value is where profits are made.

— 45 Years in Wall Street，1949

🏠 Everyday Analogy

Valuation is like buying a house: the asking price reflects mood, but true value comes from structure, location, and long-term utility. Good assets still need sensible prices.

📖 Core Interpretation

In Focus on Intrinsic Value, W.D. Gann 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：The price-value gap is the source of returns.

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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
Post‑Crisis S&P 500 Bottom and Recovery (2009)
Following the 2007–2009 bear market, the S&P 500 bottomed near 666, then advanced and repeatedly respected Gann-type retracements around 33%, 50%, and 62.5% during the early recovery phase, offering structured buy‑the‑dip entries for systematic traders.
✨ Outcome：Investors applying Gann percentage retracements scaled into the new bull market with defined risk, improving entry prices versus chasing breakouts.
2
Pre-Crash Market Top Projection (1929)
Using Master Charts, Gann identified resistance levels in major U.S. indices before the 1929 peak, warning of unsustainable speculation near key angles and time cycles.
✨ Outcome：Positions were reduced or hedged; followers who acted avoided the worst of the 1929–1932 drawdown.

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