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It might be helpful to take a look at what Graham called a “Net-Net.” If other investors perpetually undervalue your investment in a company that produces earnings, eventually the cash generated from those earnings could be given to shareholders as a dividend, etc. In an extreme example, imagine a company that the market values at $1B with $1B in assets that produces $1B in earnings. The following year, the company would have an extra billion on its balance sheet even if the share price didn’t change.



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