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 do it through in-depth analysis of macroeconomic trends, combined with technical analysis...