A practical matter in stock investing is understanding and using intrinsic stock value. Knowing and using intrinsic stock value comes from doing your homework. It starts with fundamental analysis of stocks looking at the price to earnings ratio, cash flow ratios, price to sales ratio, the quick ratio, and developing risk reward ratios in stock investment. The concept of an intrinsic stock value emerged during the dark days of the Great Depression. The stock market had flourished during the 1920’s and crashed in 1929 leaving many stock market investors the worse for the experience. At the time the stock market investing was considered little better than gambling. An economist and investor, Benjamin Graham, came up with the concepts of intrinsic stock value and a margin of safety. He and others demonstrated that stock investing could be done rationally and profitably so long as investors and traders heeded the results of fundamental and technical analysis of stocks. Investors and traders buy stocks and sell stock in expectation of profit. The plain facts of the world of investing is that without the gift of seeing the future it is impossible to always know which stocks will go up or down in price. In order improve the odds of making accurate predictions investors and traders have used time honored tools such as Candlestick chart analysis in order to see and exploit Candlestick pattern formations. This use of price pattern analysis goes back to rice trading in ancient Japan and is useful to today in options trading, commodity trading, futures trading and stock trading. However, the time horizon of Candlestick charts is typically short and medium term. Using these tools the investor and trader will typically be able to pick the most advantageous price at which to enter or exit the market.

1. Intrinsic Stock Value
By www.CandlestickForums.com

2. A practical matter in stock
investing is understanding and
using intrinsic stock value.
Knowing and using intrinsic stock
value comes from doing your
homework.
www.CandlestickForums.com

3. It starts with fundamental analysis
of stocks looking at the price to
earnings ratio, cash flow
ratios, price to sales ratio, the
quick ratio, and developing risk
reward ratios in stock investment.
By: www.CandleStickForums.com

4. The concept of an intrinsic stock
value emerged during the dark
days of the Great Depression. The
stock market had flourished during
the 1920’s and crashed in 1929
leaving many stock market
investors the worse for the
experience.
By: www.CandlestickForums.com

5. At the time the stock market
investing was considered little
better than gambling. An
economist and investor, Benjamin
Graham, came up with the
concepts of intrinsic stock value
and a margin of safety.
By: www.CandlestickForums.com

6. He and others demonstrated that
stock investing could be done
rationally and profitably so long as
investors and traders heeded the
results of fundamental and
technical analysis of stocks.
By: www.CandleStickForums.com

7. Investors and traders buy stocks
and sell stock in expectation of
profit. The plain facts of the world
of investing is that without the gift
of seeing the future it is impossible
to always know which stocks will
go up or down in price.
By: www.CandleStickForums.com

8. In order improve the odds of
making accurate predictions
investors and traders have used
time honored tools such as
Candlestick chart analysis in order
to see and exploit Candlestick
pattern formations.
By: www.CandleStickForums.com

9. This use of price pattern analysis
goes back to rice trading in ancient
Japan and is useful to today in
options trading, commodity
trading, futures trading and stock
trading.
By: www.CandleStickForums.com

10. However, the time horizon of
Candlestick charts is typically short
and medium term. Using these
tools the investor and trader will
typically be able to pick the most
advantageous price at which to
enter or exit the market.
By: www.CandleStickForums.com

11. Long term investing hinges on
identifying and exploiting intrinsic
stock value and a margin of safety.
When a promising stock is selling
at substantially below its intrinsic
stock value the investor will buy.
By: www.CandleStickForums.com

12. When the price goes up too fast or
the factors that constitute the
stock’s intrinsic value go away the
long term investor will sell the
stock.
By: www.CandleStickForums.com

13. The basic definition currently used
for intrinsic stock value is the
discounted value of future
earnings. This means calculating
expected earnings and accounting
for inflation.
By: www.CandleStickForums.com

14. Then the investment value is
compared to other investments
such as treasury bonds or dividend
stocks. A company with substantial
property holdings, cash
holdings, and no debt my have
high intrinsic value despite not
having a large cash flow.
By: www.CandleStickForums.com

15. When the intrinsic value of the
stock is substantially above its
current stock price it has a large
margin of safety. This is when the
investor will buy the stock; and so
long as the margin of safety exists
he or she will profitably hold the
stock.
By: www.CandleStickForums.com

16. A company with strong
products, low debt, and substantial
hard assets can be a value stock
which an investor will hold for
years.
By: www.CandleStickForums.com

17. However, when the margin of
safety evaporates with bad
management, poor product
performance, or other reasons the
intrinsic stock value will sink to
that of the current stock price.
By: www.CandleStickForums.com

18. That is when the investor will start
looking at Candlestick stock charts
to decide when will be the most
advantageous time to sell.
By: www.CandleStickForums.com