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Intelligent Investor

Independent Financial Research

When should you not buy a Buy recommendation? When it fails to meet your personal return hurdle. If you’re seeking a long-term annual return of greater than 10%, then you wouldn’t buy a stock that might only generate 5-8%. Let’s examine what this means with a hypothetical example. Assume you know that a stock’s intrinsic value will be $10 a share in five years – and that its share price will equal its value then too. Also, assume that the annual dividend yield on your purchase price is 4%. In reality you never know a stock’s value, let alone its future price. But you’re still implicitly making judgements about the potential returns when you buy shares.

Intelligent Investor
Intelligent Investor
Independent Financial Research

Intelligent Investor is an independent financial research service with a 14-year history of beating the market. Our value investing approach empowers Australians to make more informed decisions to build their long-term wealth. We off structural...


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