Lynch's most popular investment philosophy is "invest in what you know," which was a major theme of his best-selling book One Up on Wall Street. Lynch believes that contrary to popular opinion, smaller investors have an advantage over Wall Street professionals.
The ratio is calculated by dividing the price-earnings ratio by the sum of the earnings growth rate and the dividend yield. With this modified technique, ratios above one are considered poor, while ratios below 0.5 are considered attractive.
It's calculated by taking the original cost of the asset and then subtracting any depreciation, amortization or impairments that have occurred over time. Essentially it's the remaining value of the asset after accounting for wear and tear or any decrease in value.
Answer: Lynch et al 1972, and cited by Ardoles, 1992, suggested the formula below to determine the sample size: n= NZ² x p (1-p) _ Where: n= Sample Size Nd² + Z² p (1-p) N= Population Z= the value of the normal variables (1.96) for a reliability level of 0.95 p= the largest possible proportion (0.50)
The Peter Lynch fair value calculation assumes that when a stock is fairly valued, the trailing P/E ratio of the stock (Price/EPS) will equal its long-term EPS growth rate: Fair Value = EPS * EPS Growth Rate.
Hubble's Law is the relation between the recession velocity of a galaxy and its distance: Vr = H d, that is, the velocity of recession Vr equals the distance d times the Hubble constant H.
Fair value (FV) is the estimated price at which an asset could be sold, or a liability could be settled, in an open transaction between willing parties in the market, as of a specific date.
As of 2025-01-08, the Fair Value of Tesla Inc (TSLA) is 99.24 USD. This value is based on the Peter Lynch's Fair Value formula. With the current market price of 394.36 USD, the upside of Tesla Inc is -74.8%.
The basic formula for determining a revenue requirement is: R ≡ B • r + E + d + T where: R = revenue requirement, B = rate base, which is the amount of capital or assets the utility dedicates to providing its regulated services, r = allowed rate of return, which is the cost the utility incurs to finance its rate base, ...
The person that turns over the most rocks wins the game.
Warren Buffett's investment strategy has remained relatively consistent over the decades, centered around the principle of value investing. This approach involves finding undervalued companies with strong potential for growth and investing in them for the long term.
If purchased at a good price, Lynch says he expects good but not enormous returns--certainly no more than 50% in two years and possibly less. Lynch suggests rotating among the companies, selling when moderate gains are reached, and repeating the process with others that haven't yet appreciated.
Lynch advises evaluating stocks based on various factors. Check the price-to-earnings (P-E) ratio compared to the company's history and the industry. Look for lower institutional ownership, insider buying, and share buybacks. Assess earnings history, but that's less vital for asset plays.
Peter Lynch is the former manager of the Fidelity Magellan Fund and a world-renowned investor, credited for creating the price-to-earnings-growth (PEG) ratio and popularizing the "buy what you know" investment strategy.
The Rule of 20 helps assess if the stock market is fairly priced by adding the S&P 500's P/E ratio to the annual inflation rate. Historically, a total of 20 indicates a fair market value.
Peter Lynch Fair Value is calculated as follows: Peter Lynch Fair Value = {PEG} * {5-Year EBITDA Growth Rate} * {Earnings per Share} If 5-Year Earnings Growth Rate is greater than 20% a year, we use 20. Please note that we use the 5-year average growth rate of EBITDA per share as the growth rate.
Rapid Advancements in Technology
From Autopilot to battery innovations, Tesla vehicles often feature the latest in EV tech. However, this constant innovation means that newer models often outshine their predecessors, leading to faster depreciation of older vehicles.
Fair Value Estimate for Tesla
With its 2-star rating, we believe Tesla's stock is overvalued compared with our long-term fair value estimate of $210 per share. We use a weighted average cost of capital of just under 9%. Our equity valuation adds back nonrecourse and non-dilutive convertible debt.
The formula of fair value method is adding intrinsic value and yield value and dividing it by 2.
'Fair market value' is the highest price that a willing buyer would have paid to a willing seller, assuming: 1. That there is no pressure on either one to buy or sell. 2. That the buyer and seller are fully informed of the condition and quality of the car.
'Red shift' is a key concept for astronomers. The term can be understood literally - the wavelength of the light is stretched, so the light is seen as 'shifted' towards the red part of the spectrum. Something similar happens to sound waves when a source of sound moves relative to an observer.
The good news is that recessions generally haven't lasted very long. Our analysis of 11 cycles since 1950 shows that recessions have persisted between two and 18 months, with the average spanning about 10 months. For those directly affected by job loss or business closures, that can feel like an eternity.
Single income: Save six months or more
Generally, single individuals or families with a single income should save at least six months of expenses, experts say. But higher levels of cash reserves could offer more flexibility when faced with a job loss or economic downturn.