An investor who can do a superior job of estimating intrinsic value can consistently make superior market timing (asset allocation) decisions or acquire undervalued securities and generate above-average returns.

Question

Quizplus · Accepted Answer

If an investor can accurately estimate the intrinsic value of a particular security, they are more likely to identify undervalued assets and make better market timing decisions (i.e., allocation of assets based on market conditions). This can lead to generating better returns than other investors who may not have as accurate an understanding of intrinsic value.

An Investor Who Can Do a Superior Job of Estimating