A Slice

Equity is a slice of ownership in a real underlying business. An Equity Analyst studies what that business does to determine their view of the Intrinsic Value of owning that share. A $10 note is worth $10. The price of a stock is simply the last share that changed hands. It is a quote. What the business is really worth will be determined in the future. It will depend on the price paid when it is bought, and received when it is sold, and the dividends paid out in between. What the business does matters. Matters fundamentally. The Equity Analyst knows that price is not value. “Intrinsic Value” isn’t a single number. It is a worst case. It is a best case. It is the world of possibility for that business. A business thrown into an environment that is complex, ambiguous, and uncertain. You can’t know the value. You can gain confidence in the business’s ability to last. In its ability to survive. In its ability to create value. Then you can invest for the long term.