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, Styria. The project was implemented together with stock market experts and programming specialists and is constantly being expanded and improved. Fair Value Calculator was founded in 2005 and has grown steadily ever since.
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 should be a better performance of your stock portfolio.
Very 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.
With the help of the Fair Value Calculator page, every newcomer can learn our concept and strategy within a very short time.
Dr. Peter Klein, BA
Founder of fairvalue-calculator and inventor of the Fair Value Calculator. You are welcome to contact me, I am happy about any cooperation, criticism or suggestions for improvement! Just write me an email and i am happy to discuss.
8720 Knittelfeld - Austria
Born in Graz, probably the most charming city in Austria, I started to get excited about the stock market at the age of 14. How could it be that some seemingly few investors are earning an extraordinary amount of money in stocks, while friends and relatives claim that the stock market is a risky place where you can quickly lose your home. So what distinguishes the winners from losers?
These questions drove me to read almost every stock market book in 15 years what you can find on Amazon. With my mother's credit card, the books were easily ordered and within a very short time in my hands. If I had invested the cost of the books back then in shares of Amazon, I would probably be quite fine right now.
Let me just check this out for you: I was 14 years old and now I'm almost 30 years, so it was in 2004 when I ordered my first book from Amazon. The stock price of Amazon.com Inc. was around $ 30 at the time. Now the stock price for Amazon is 1800 USD. The invested capital would have increased sixty times! When you consider that a book about the stock market costs 50 $ and I have more than 100 books, so I would have invested 5000 $ in those books.
Well, investing in education brings the highest interest rates, but if I had invested the money in Amazon shares in 2004, my portfolio would now have a proud value of $ 300,000. Would not have been so stupid.
Good that you have bought with this website, only the essence of my 5000 € "book value" and so have saved significantly. During my 15 years of experience, I absorbed books and especially stock market strategies like a vacuum cleaner and studied and tried many approaches and methods.
In summary, I can anticipate that only one type of system was successful for me, namely that of the value approach, ie investing in stocks whose true value is higher than the current market price.
After my splendid career at school, which was comparable to that of Albert Einstein, who is said to have been rather poor at school, I started my service at the Hospital Graz.
By the way: In the days of Albert Einstein, the grading system in Switzerland was upside down, which means that Einstein's grades in algebra and physics were not catastrophically bad with a grade of 6, but correspond to today's 1 or very good - a widespread misconception.
In my time, however, the grading system was already as we know it today, but the notes, like Einstein's.
When I arrived at my service at the hospital, I was assigned to the Department of Gastroscopy, and soon learned that this is not the human body opening I want to deal with on a daily basis.
Although I am trimmed by my grandfather and father, who is a doctor, the other dentist, but not in this form. Therefore, I have studied dentistry and now run my own dental practice.
Even during my studies I did not let go of the stock market, where I made the biggest changes to the Fair Value Calculator and the associated method.
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 in every decorated law office.
I liked them very much and called them 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 have 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: hard to learn and apply to a beginner.
So I was looking for a solution that would give nearly the same 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 was 90% the same as the discounted cash flow method.
Why do I say statements here and not results? Quite simply, the formula does not always give the same result but almost always the same statement. So, if you were to calculate a true value of 100 for a stock using the discounted cash flow method, the result of the fair value calculator is not always 100, but the result is the same. I do not have to know the exact "intrinsic value" here, I just have to decide whether to buy the stock or not. So 1 or 0.
If the fair value calculator gives me a fair value of 120 instead of a fair value of 100, that makes no difference if the stock is at 50, because I can not buy the stock more than I can anyway.
The Fair Value Calculator is more of a traffic light that gives me a buy signal. Combined with certain guidelines, you get a system that delivers 90% of the same level of decision making as proven, fully professional systems and analysis methods, but much easier and faster.
In my test, I would have bought 95% of the shares, which I would have judged with other methods than worth buying. (By the way: It often happens to me that half a year later, big analyst houses recommend the stocks that I already have in the portfolio.)
Although I had put the formula on paper, but it was still too cumbersome for me to insert each time by hand on a piece of paper the key figures of the stock in the formula and execute the calculation each time with a manual calculator.
That's why I wrote a code for the formula and the result is published on the homepage www.fairvalue-calculator.com and also easy to use.
All you have to do is enter the necessary key figures in the calculator and after a short click you get immediately the true value of the stock. Great, is not it?
Not only simple, but also freely applicable for other users, I was now able to perform the calculations of fair values for my shares faster. Of course, I wanted to know if the Fair Value Calculator provides useful results or only calculates lottery numbers. Well, the upcoming lottery numbers would also be a lucrative result, but I think you know what I mean here.
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.
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