"It is **proper to use the liquidation value method when estimating the value of a company that is plagued by bad news**. Often a series of missed earnings expectations and negative market coverage can create an extremely oversold situation and a bargain stock price. **If it is really impossible to determine future earnings, as long as there is a good chance those will be positive over the long term, determining the value of the assets the company owns helps to give you a worst-case scenario value**. When the worst-case liquidation value is higher than the stock price, you have an investment with limited downside." ([Location 2571](https://readwise.io/to_kindle?action=open&asin=B07CNFFJ9J&location=2571)) --- **Tags** -- [[quotes]], [[asymmetric-distributions]], [[value-investing]], [[book-value]], [[liquidation-value]], **Source** -- [[202506221723 - LN - Modern Value Investing]]