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About The Fair Value Calculator Method:
Fair Value Calculator is an online service founded by Dr. Peter Klein, BA. Through years of studies and evaluations of backtests, existing fair value strategies have been improved and, above all, greatly simplified. Fair Value Calculator is located in Austria. The project was implemented together with stock market experts and programming specialists and is being expanded and improved constantly. Fair Value Calculator was founded in 2005 and has grown steadily ever since.
I find myself in my modest student apartment over hundreds of annual reports of stock market companies again. It was a dark apartment with only light coming through the windows on one side. I had set up a small office of Ikea furniture, consisting of a coffee table, an armchair and a lamp with a green shade, as you would find it in every decorated law office.
I admired it and called it the "Club of the Thinkers" lamp, based on an episode in "Scrubs" where the janitor founded the Thinkers' Club. The lamp gave me inspiration and also the necessary light to study the stock numbers. Over the course of a year I had studied common valuation methods and compared their results.
Valuation methods that are intended to give the true value of a share are, for example, the discounted cash flow method or multiplier approaches (valuation with multiples). No matter which method one chooses, they all have their raison d'être in a sense, and all of them have one thing in common: they are hard to learn and apply to a beginner.
So I was looking for a solution that would give great results as the established evaluation models, but should be much easier to use. So it took a system that was quick and easy to use, spitting out the true value of stocks quickly, and then investing in stocks whose fair value is higher than the current stock market price. The plan was to buy the dollar for 50 cents and wait for other participants to recognize the true value of the stock. Subsequently, the higher demand would also increase the stock market price of the share.
The plan was good. All I needed was System X. In search of System X, I calculated 500 shares using the discounted cash flow method and thus received 500 fair values for 500 shares.
So I had the metrics and the fair values of 500 stocks and now I tried to simplify the X way. For another year, I developed formulas and played with metrics until I had a formula that showed reliable data for the identification of intrinsic value.
To validate the data, I again randomly selected hundreds of stocks and blindly inserted their historical measures to see if an investment would have yielded such stocks at that time.
So I invested virtually in a backtest in stocks without that I knew their development until today. And indeed: No matter in which period, whether 2, 5 or 10 years, whether crisis or not, the stocks whose true value according to the Fair Value Calculator was higher as their price performed far better than other stocks.
The aim of the project is the identification of "cheap" stocks. This means that with our tools you can easily and quickly identify cheap stocks and a favorable market environment.
The result is a better performance of your stock portfolio.
Highly complex valuation methods, which are difficult to learn for stock market beginners, have been simplified so that thousands of shares could be valued to provide you with professional information even if you are not an expert.
The goal of the Fairvalue Calculator is to find cheap undervalued stocks. The comparison of the intrinsic value (fair value) and the current stock price enables an assessment of how cheap or expensive a share really is. In the long-term past it has been shown that holding undervalued stocks for a long time has brought better returns.
The Fairvalue Calculator consists of a self-developed formula that uses several fundamental key figures to estimate the intrinsic value of stocks. The key figures you enter are combined in such a way that the most accurate fair value possible is obtained.
To use the Simple Fairvalue Calculator, earnings per share and revenue growth must be entered. These key figures can easily be found on the relevant internet pages on stocks or the annual business reports of stock corporations, which you can usually find on the stock corporation’s homepage under the “Investors Relations” tab.
In the Advanced Fairvalue Calculator, you can determine the intrinsic value of a stock (fair value) yourself free of charge with the help of other more detailed fundamental key figures.
In the Premium Tools we already load financial key data, fundamental data and information to more than 45.000 stocks worldwide to estimate a fair value and to value the stock. In addition, the calculated fair value in the Premium Tools is combined with a momentum approach in order to favor stocks that have achieved particularly high returns in the past.
This is to ensure that the fair value (intrinsic value) of (almost) every stock worldwide is immediately accessible and that users can call up many fair values from the database and find better stocks instantly.
Frequently Asked Questions:
If you have questions about the tools, make sure your question hasn't already been answered here:
Value strategy, also known as value investing, is a special form of stock investment. With this form of share investment, only shares are purchased that have a higher real economic value than the current stock market price.
Banks very often charge issue surcharges and fees for the management of the fund. These fees are usually so high that these funds perform significantly worse than the overall market. On the other hand, if you set up an online depot yourself and manage your shares yourself, you save yourself these fees and can beat the market more easily. Which combination of different countries and market capitalizations of the stock companies promise the highest returns? In order to reduce the risk in a share portfolio, it is advisable to include shares from different countries and of different sizes in the share portfolio. Here you should put together the stock portfolio as described in the article on asset allocation. A statement as to which countries or which market capitalization promise more returns cannot generally be made. What is certain, however, is that intelligent asset allocation lowers the investor's individual risk.
That depends on many different factors. Large public companies often have a high market correlation. This means that if the market develops poorly, this share will hardly move from the spot for many years. However, one thing can be said: In our models, 83% of Fair Value stocks reach their true value within 5.5 years. In boom phases, the shares usually reach their fair value after a few years. Basically, it can be said that the minimum holding period should be several years.
Do you have problems with paying or activating your premium account, lost your password or have other administrative problems?
You can reset your password in the login mask for the Premium Tool. A new password will then be sent to your email, which you can then use to log in to the Premium Tool again.
If you can no longer log into your Premium Tools, try to reset the password in the Premium Tools login mask. You will then receive an email with your new password, which you can change again in your account under settings.