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To determine whether a company is undervalued you must have some prediction of future business prospects.

• marvin 6y ago
  Or have faith in the guy that's been the most successful investor in modern history, up until now.
  • cik 6y ago
    He's still been the most successful investor in modern history, including covid. It's a blip to him - and he's right. He's one of the few to consistently beat the S&P 500, and even so, he recommends just buying the index.
    • fiachamp 6y ago
      good luck buying the index in a zero interest rate policy world...see nikkei since 1990 for example performance
      • cik 6y ago
        A zero interest (or low) interest rate doesn't have to equal stagnation. The free flow of money could also kick start an entire generation of entrepreneurs, solely by reducing capital risk. The performance of the Nikkei is significantly more complicated than just a low interest rate. For example. the lack of productivity and population growth in Japan is another set of pieces that also impacts the rate of return.
• heavenlyblue 6y ago
  You could just look at it’s current valuation and assets and compare it to the valuations and assets of other companies in the area. Basically you could bid on some esoteric future or you can bid on the bad present. This is the difference between someone who had a good life and education and suddenly ended up in a car crash and lost all of their family vs someone who decided to be a meth addict and ended up killing their family. In both cases you’re bidding on their future and in both cases they are in the same position, but it doesn’t make them equivalent.