What is Intrinsic Value

You’ve heard people talk about the real value of a company. You’ve heard about value investors like Warren Buffet, and maybe even Benjamin Graham. But what is intrinsic value?

Intrinsic value is simple by definition. It’s the actual value of a security (stock or company) taking into account everything. The intrinsic value can be found differently and may have different values for the same security for different people. But when talking about the intrinsic value of something your sayings it’s true value, not the market value, and not the book value, accountants have a very specific way of getting at the value.

The reason intrinsic value has a different meaning for different people is because you may value the companies Trademarked name differently than I would. I might not think the Golden Arches are worth much while you may think they’re worth all the money in the world.

The same goes for the companies equipement, it’s product inventory, and even the land it’s sitting on. Each investor must find a way to value a security based on his or her own weighting of these factors. But there’s no denying that intrinsic value really means the actual value.