Looked at another way, say the price of company A stock drops 50 % in the short - term due to unrelated bad news about a competitor, company B, with no change in
the underlying fundamentals of company A. Does this make company A less attractive (due to volatility) or more — as you can buy the same now for half price?
«You need to make investment decisions based on
the underlying fundamentals of a company, not on rear - view speculation.»
Multiply that by the millions or billions that venture capitalists were throwing at this bubble, and it's easy to see why big money managers were in a technology euphoria and not too worried about
the underlying fundamentals of these companies.
Not exact matches
Unlike conditions prevailing at the turn
of the century (massive stock valuations and recession), we think the earnings
fundamentals underlying many idea -
companies (
of which tech is a part) remain solid.
Not all
of the ideas have worked and a couple back - fired — in defiance
of the
company's
underlying fundamentals — but many ideas are well below the price at which they were presented either the first time or presented again thereafter.
However, because we don't believe the
company's
underlying fundamentals have changed, our long - term view
of Daiwa's intrinsic value remains intact.
In reality, the signals market prices send are meaningless to the
fundamentals of the
underlying company, they benefit us only buy offering an opportunity to buy or sell at any given time.
Won't the fact that every day vanguard is buying the S&P 500 index ensure that the
companies already listed on the S&P 500 are likely to remain there regardless
of their
underlying economic
fundamentals?
Changes in market sentiment can cause a stock to drop, but that doesn't mean the
underlying business model or
fundamentals of that
company has changed at all.
For over 30 years, Third Avenue has consistently pursued a
fundamental, bottom - up approach to deep value investing: we focus on the
company's balance sheet, the value
of its
underlying assets, and the discounted price
of its securities.
With that said I will venture that yield
of XOM will continue to rise for at least another year as the stock price slowly deteriorates to match the
companies underlying fundamentals of increased debt and reduction in FCF.
Within the context
of a value - based investment process in particular, we believe that investors should break the link with capitalization within the stock weighting and selection process and replace it with a weighting scheme that favors the
underlying company fundamentals and liquidity.
Adopting the discipline
of rebalancing bond exposures toward
fundamental weights, which are linked to the economic size
of the
underlying issuing
companies rather than to the amount
of debt they have issued, achieves the dual objective
of: 1) tilting holdings toward
companies with better debt servicing and higher credit ratings; and 2) taking advantage
of mean reversion in securities prices over time.
In Graham's view a speculator was unconcerned with the intrinsic value
of a business, and interested only in the price he could hope to get when he sells out — in other words the speculator's concept
of value is unrelated to the
fundamentals of the
underlying business
of the
company, whereas the fluctuations in market price are
of great importance to him.
Most purchases made on the basis
of fundamental research are for the long term as the investor has invested taking note
of the
underlying company and not a short - lived price trend.
Value is also a «smart beta,» having been indicized — the concept
of overweighting
companies whose stock price is relatively cheap compared to their
fundamentals underlies a swathe
of indices, many
of which have gained a broad traction with investors.
Therefore, I looked at the deal through the lens
of the F.A.S.T. Graphs ™
fundamentals analyzer software tool and the FUN Graphs (
fundamental underlying numbers) in order to evaluate the value to me as a Southern
Company and AGL Resources shareholder.
The Bitcoin chart relies on technical analysis, a field
of investing that is somewhat controversial because buying decisions are based on the movement
of a particular stock or other asset, rather than on the
fundamental valuation or future opportunity
of the
underlying company or security.