The Autobiography of a Stock, Second Edition

by Manoj Arora

“A stock ‘X’ may have a market price of INR 120 while its intrinsic value as per your calculation is INR 150. This is a good enough bargain to get into the stock. However, even after two years, the stock is yet to hit the intrinsic value and is still hovering at close to INR 100. You have been waiting patiently for it to boom, but your revised calculation of intrinsic value after two years shows that the new intrinsic value of this stock is only worth INR 110 now. This is a ‘sell’ situation where your intrinsic value is quite close to the current market price of the stock. It is very unlikely that the stock price is going to go drastically up from here. Therefore, you should go ahead and sell it.”