Does Warren Buffett Know Something That Wall Street Doesn't? Berkshire Hathaway Is Pounding the Table On a Stock That Has Struggled.
While Warren Buffett has been willing to adapt to changes in the stock market, he will always at his core be a value investor. Value investing is based on a simple-sounding premise: Buy stocks that are trading at less than their intrinsic value.Yet in practice, value investing is incredibly difficult. Investors need to determine what a company's intrinsic value really is, then game out what kind of valuation multiples the market might assign it if the company can attain that value. Often, investments that look like value stocks turn out to be value traps. In other cases, it can take a long time for the market to notice that it has been underpricing a company.Buffett is arguably the best value investor of all time, so when his company, Berkshire Hathaway purchases a stock, the market pays attention. Recently, the billionaire has been pounding the table on a stock that has been struggling for a few years. Does Buffett know something that Wall Street doesn't?Continue reading
While Warren Buffett has been willing to adapt to changes in the stock market, he will always at his core be a value investor. Value investing is based on a simple-sounding premise: Buy stocks that are trading at less than their intrinsic value.
Yet in practice, value investing is incredibly difficult. Investors need to determine what a company's intrinsic value really is, then game out what kind of valuation multiples the market might assign it if the company can attain that value. Often, investments that look like value stocks turn out to be value traps. In other cases, it can take a long time for the market to notice that it has been underpricing a company.
Buffett is arguably the best value investor of all time, so when his company, Berkshire Hathaway purchases a stock, the market pays attention. Recently, the billionaire has been pounding the table on a stock that has been struggling for a few years. Does Buffett know something that Wall Street doesn't?
