What is Fair Value?

[DavidS]

When the futures are going on in the morning, they say we're either above or below fair value by a certain point amount... what does fair value mean?

 

[NOBama]

Here's a couple of examples: example1, example2

 

[editec]

That was informative, No.

Thanks

 

[Paulie]

When the futures are going on in the morning, they say we're either above or below fair value by a certain point amount... what does fair value mean?

You trade 10's of thousands of dollars on a daily basis, and you don't know what fair value is?

 

[NOBama]

You trade 10's of thousands of dollars on a daily basis, and you don't know what fair value is?

It's amazing how many people invest in the markets without any knowledge, especially "Cramericans". A lady at our church once invested over 10k in a company because Cramer recommended it.

I don't claim to be a market wizard by any means but I'll be damned if I'd invest that kind of money in ANY company without doing some research.

 

[Paulie]

Taking advice and acting on it like that based on ONE PERSON'S recommendation is foolish.

I hope she at least did that BEFORE he screwed the Bear Stearns holders earlier this year, because if you didn't know he was an idiot before that, you have no excuse not to know NOW.

 

[mattskramer]

Fair value - Wikipedia, the free encyclopedia

Fair value, also called fair price, is a concept used in finance and economics, defined as a rational and unbiased estimate of the potential market price of a good, service, or asset, taking into account such factors as: relative scarcity, perceived utility (economists' term for subjective value based on personal needs), risk characteristics, replacement costs, or costs of close substitutes, production/distribution costs, including a cost of capital.