Consistency of value and price

In the field of investment, traditional values often define investment opportunities with “discounts”

Yesterday's high-priced item. If the price drops today, it's considered a treasure

This kind of thinking, which seems logical,

One key factor was actually overlooked: changes in stock valuations

For investors seeking growth,

It's a misconception to simply equate a “discount” with an investment opportunity

In the stock market, superficial “cheap” is often synonymous with “expensive.”

And behind the “expensive” one may be hiding the next growth stock

In fact, the relationship between value and price is more complex and often goes hand in hand

For a long time, many investors have relied on PE as an indicator to invest

However, this approach is easy to fall into misunderstandings

The price-earnings ratio only reflects the historical situation, and there is no predictability for future profit growth

In the market, analysts often suggest investors go to the bottom of stocks that have plummeted in price, believing that they have bottomed out.

The PE value also reached an all-time low

However, against the backdrop of continued macroeconomic deterioration,

These stocks are likely to perform worse and fall into the “bargain” trap

In contrast, stocks with high PE values often represent the market's premium on growth stocks.

This is a normal phenomenon

As the company's profit expectations continue to rise,

The high PE value reflects the market's recognition of its rapid growth

Therefore, instead of trying to predict short-term stock price fluctuations,

It's better to focus on whether the company can continue to improve its profitability.

The core of investing is to determine whether there is potential for stock price appreciation.

We should make investment decisions through in-depth analysis of macroeconomic trends, combined with technical analysis,

This is the philosophy that “The Way to Get Rich” emphasizes to the students:

Improve your chances of winning by investing in conjunction with technical analysis through macroscopic analysis of future trends

If you don't want to be distracted from studying, then focus on investing in ETFs

Like QQQ, SPY, SOXX, etc

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