The Intellectual
Investor’s
Lexicon
By Vitaliy Katsenelson
U
Unanalyzable Stocks
Large financial institutions appear unanalyzable. In fact they are more like highly leveraged hedge funds and, as with hot dogs, you don’t really know what goes into them. Without proper analysis, one cannot assess risk or determine valuation, reducing ownership to speculation.
Undervaluation vs. Cheapness
Statistical cheapness is often easy to see: A company that trades at 7 times last year’s earnings is considered cheap, but it may or may not be undervalued.
