Intrinsic Value

Benjamin Graham's method rests on one stubborn distinction: price and value are different numbers made by different processes. Price is set every few seconds by whoever happens to be trading. Value is something you estimate slowly, from what the business has actually done. That means its average earnings over several years rather than one bright year, the dividends it has really paid and the assets on its balance sheet. Graham never claimed the estimate could be precise. A sensible range is enough, because its job is narrow: to tell you whether a stock is plainly cheap, plainly dear, or somewhere you cannot judge. The order matters. If you look at the price first, it quietly becomes your anchor and your 'estimate' drifts towards it. Work out the range first, write it down, and only then check what the market asks. When the answer is 'cannot judge', walking away is a valid result.