Trading Strategy: Net Current Asset Value vs. Market Cap

This is the oldest trick in the book and one of the most reliable stock picking strategies.

Buying companies under the net current asset value allows you to buy very cheap business.

Warren Buffett famously used this strategy after learning it from Benjamin Graham.

Buffett would later outgrow the strategy but that was after he made millions of dollars perfecting it.

If you find a company who's net current assets are above it's market cap, than the operational part of the company has negative added value. E.g. If ater tax operating income is lower, than cost of financing.