What is fundamental value?

Jim O'Shaughnessy explains that fundamental value comprises both intrinsic and emotional components. Intrinsic value typically relates to the tangible aspects, like the price you’d pay for a commodity such as oil for practical uses. However, emotional value is the perception and sentiment attached by the buyer, which can significantly influence an asset’s market value. This blend of intrinsic worth and emotional perception forms the total fundamental value of any asset 1.