easy to quote warren buffett‘Price is what you pay, value is what you get.’ However, many investors are still struggling with a simple but important question: Is this stock cheap, fairly valued, or expensive? Valuation often seems very complex, with formulas that seem reserved for professionals. How can everyday investors avoid all the noise? Let us show you how to calculate the fair value of any Singapore stock in three practical steps.
Why does fair value matter?
Everyone can see a great business, but buying a great business at the wrong price can still yield poor returns. Reasonable pricing ensures you don’t overpay. It allows you to identify opportunity And make smart decisions when it comes to investing in a company. It is not about getting the exact price, but about making a reasonable estimate to protect your capital.
Step One: Estimate Future Earnings or Cash Flows
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