MDD: Resilience Key in Value Investing

In value investing, spotting undervalued stocks matters, and so does resilience in crashes. MDD (Maximum Drawdown) is the largest peak-to-trough drop in price.

Up front: MDD is not an IV Score criterion. The IV Score rates quality and price on 10 accounting and management checks (D/E, profits, ROCE, P/E, FCF, moat, management…). A name can have a high IV Score and a violent chart history — or the reverse. Two different readings.

Maximum Drawdown is the worst percentage loss over a period. Unlike ROCE or P/E, it describes the price path, not the balance sheet.

A low MDD (often cited around 30–40% over 5 years) means the stock limited damage in crashes. For a retail investor who does not trade, that is psychological comfort — not proof the business is high quality.

How to relate it to the IV Score (without mixing them)

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.