Rayeiris Maduro Rondon @Rayeiris: "💲💵𝒫𝓇𝒾𝒸𝑒 𝒱𝒮 𝒱𝒶𝓁𝓊𝑒 💎 🥇 One..."

Australia

💲💵𝒫𝓇𝒾𝒸𝑒 𝒱𝒮 𝒱𝒶𝓁𝓊𝑒 💎 🥇 One of the mistakes we make when we start investing is not understanding the difference between price and value, and this is a key difference between being an 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿, and just being a trader. Price: The movements we see every day on our stocks are the price, and this is given by the supply and demand of the shares of the company we’re trading. This change every day is caused by market sentiment and emotions, and only some of them have an analytical justification. Value: Value represents a company’s true worth. This could be given by objective factors as the total of the sum of the tangible (properties, machinery) and intangible assets (patents, software) plus cash minus debt, but also includes subjective factors such as distribution channels, product innovation, and competitive advantage. This doesn't change in the short term. A bubble: 🫧🫧 This happens when the price and the value don't have any relation to each other, and of course, this isn't sustainable over time. That's why when a company, an industry, or a whole sector is overvalued, you have to be very cautious about believing you can buy high and sell even higher. 𝐂𝐨𝐧𝐜𝐥𝐮𝐬𝐢𝐨𝐧 I recommend not seeing the price when picking a stock. It is so much better if you think of the shares of your stocks as a portion of your companies, and if your analysis is correct, and you pay a fair price, over time you’ll see the returns. 🤔Tell me, do you know how to recognise a bubble? Would you like a post about it? $BTC $BRK.B (Berkshire Hathaway Inc) $SPX500 $AUS200 $NVDA (NVIDIA Corporation)

5 Mentioned

BTC

Bitcoin

BRK.B

Berkshire Hathaway Inc

SPX500

AUS200

NVDA

NVIDIA Corporation

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