Did you know that stocks have many different types of values? ๐ค
Stocks have a stock price, intrinsic value and potential future values ๐คฏ
Only the stock price is set, but even that changes all the time ๐ท๏ธ
Intrinsic value and the potential future value are subjective though ๐ฅ
So, some investors try to identify stocks that will be valuable in the future and worth more than their current price! ๐ก
To be exact, value stocks are stocks of companies that are trading at a lower price compared to their intrinsic value ๐
Investors who invest in value stocks are looking for companies that they believe are undervalued by the market ๐ฐ
Value stocks are usually from companies that have been in the market for a while and have a history of stable earnings ๐ช
Investing in value stocks requires patience and research as it may take time for the market to recognize the company's true value๐
One advantage of investing in value stocks is that they can provide a margin of safety, as they are already trading below their intrinsic value ๐ก๏ธ
Another advantage is that they may have lower volatility compared to growth stocks ๐
However, one downside of investing in value stocks is that they may not experience significant price appreciation in the short term ๐
In addition, there is no guarantee that the market will recognize their true value ๐ธ
Even though finding value stocks can be hard, some of the most famous investors believe in value investing and value stocks ๐