Opportunities arise when market prices deviate from intrinsic value

All investments represent a set of future cash flows, which can be valued with reasonable accuracy. The progression of this intrinsic value is fairly stable through time. However, investment market prices vary considerably over time - most often due to self-reinforcing cycles of enthusiasm or negativity.

The patient, skilled investor will benefit from buying investments at prices well below intrinsic value and holding them until they can be sold at above intrinsic value.
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