Importance of NAV, page-3

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I won't get into a discussion about the very fraught subject of what investment "style" may perform best, over the long term. Suffice to say that NAV is an aggregation of market prices, whereas I like to think in terms of how much intrinsic value I am likely to be getting for each dollar of my purchase, and how much additional intrinsic value the fund manager is likely to be acquiring with each incremental dollar allocated going forward.

My reference to "momentum style growth" was not to indicate that there's a divide between value and growth. I fully agree that growth has a value and thus falls withing a value investors domain. I was emphasising the word "momentum".

So my point was, if a fund, or index, is very highly priced, then it is likely that intrinsic value << NAV. In a " value fund" run by skilled operators with the right temperament and a long term focus, it is much more likely that intrinsic value > NAV.

My point is, in answering the question about what sort of returns we can expect by year 10, the question of discount_to_intrinsic_value is far more important than the question of discount_to_NAV.