Intrinsic value, Real value or Absolute value is the value of an investment after removing the effects of inflation.

Inflation adjusted charts shows the Real Value. Inflation adjusted price, takes away the inflation. Inflation adjusted chart is calculated in today's money.

Let's get Gold Inflation Adjusted chart as an example. Nominal price of Gold in 1979 was $ 600, today the $600(year1979) = $1,866(year2011).

We call this Inflation. So we plot Gold Inflation Adjusted price for year 1979 = $1,866(calculated for 2011 dollar value).

Gold inflation adjusted price, is just where it was in December 1979

Gold real value from 1979 has been reduced to almost nothing but inflation.


Gold Inflation Adjusted chart - July 2012

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Nominal price of Chevron (CVX) in 1979 was $ 2.54, today the $2.54(year 1979) = $7.90(year 2011).

Chevron (CVX) inflation adjusted price $7.90(year 1979) to $102.84(year 2011), Real Value increase 12.9 times over 30 years. Excellent investment.

Chevron (CVX) inflation adjusted  chart shows that Real Value is positive.

Chevron stock nominal price from December 1979 ($2.54) to September 2011 ($92.59) rose 3,548.3% (35 times), that is average rise 115.29% P.A.

over a period of 31 years, or 11.68% P.A. compounding (percent every year) over same period of time (31 years).

Chevron Inflation Adjusted chart - July 2012