American Express is used as a historical example of Warren Buffett and Charlie Munger valuing a company differently, but both finding a margin of safety at the market price.
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How to Know if a Stock is Cheap or Expensive? Part 1 of 2
Aug 19, 2026
The creator explains the importance of stock valuation, contrasting a personal anecdote of losing money on L&M Group due to mistaking a low price for cheapness with a successful investment in Google where he bought at $540 (pre-split) when he calculated its intrinsic value at $900, selling two years later for an 80% return. He emphasizes that intrinsic value, based on cash flow and profits, is key to determining if a stock is truly cheap or expensive, not just its share price.
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Oracle is used as an example when discussing how to calculate intrinsic value and the concept of a base case valuation.
McDonald's is listed as a company whose intrinsic value consistently increases over time.
Visa is mentioned as a company whose intrinsic value consistently increases over time.
Mastercard is listed as a company whose intrinsic value consistently increases over time.
Amazon is mentioned as another example of a great business whose intrinsic value grows over time.
Microsoft is cited as an example of a great company whose intrinsic value consistently increases over time, even if its share price fluctuates.
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