MDD: Resilience Key in Value Investing

In value investing, spotting undervalued stocks is key, but their resilience in downturns is equally vital. MDD (Maximum Drawdown) gauges the largest peak-to-trough drop in a stock's price, highlighting its ability to recover without wiping out your capital.

What is MDD and Why It Matters in Value

Maximum Drawdown is the maximum percentage loss from a peak to a trough over a period. Unlike standard ratios, it assesses real volatility under market stress.

A Stability Metric, Not Just Performance

A low MDD (under 30-40% over 5 years) indicates a stock that limits damage in crashes. For value investors, it's essential: you buy low, but high MDD can erase years of gains.

Pour aller plus loin, utilisez notre calculateur de valeur intrinsèque pour estimer une fourchette de valeur sur un ticker, et parcourez les autres articles du blog ainsi que la page Définition pour approfondir les concepts d'investissement de valeur.