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Conventional value investing uses earnings or book value as a yardstick for estimating the intrinsic business value of a stock. Doppler Value Investing uses free cash flow and net liquidity as an alternative to earnings and book value for estimating the stock's intrinsic business value.

What makes value investing so great?

Of all of the investment philosophies, value investing makes the most sense. All successful businesses have an intrinsic business value, and buying such a business at a discount to this intrinsic business value will likely lead to good investment performance. Buying even a very successful business at a premium to intrinsic business value is likely to lead to mediocre investment performance.

What's wrong with conventional value investing?

The most popular yardsticks for conventional value investing are PE ratios, price/book ratios, price/sales ratios, return on equity, and return on assets. Unfortunately, these figures are easily manipulated, and many of these yardsticks are biased towards capital intensive companies with aggressive accounting practices and biased against companies that use conservative accounting practices and don't need much capital. There is something wrong when a given PE or price/book multiple is considered impossibly cheap for one type of company but insanely overpriced for another type of company. Most of the stocks with the very lowest PE ratios and price/book ratios are fake value stocks. The high quality stocks are much less likely to be among those with the very lowest multiples.

What makes Doppler Value Investing better than conventional value investing?

Doppler Value Investing uses pre-tax free cash flow and net liquidity (liquid assets minus total liabilities) instead of earnings, book value, or sales. The advantages are:

What are the limitations of Doppler Value Investing?