Media Thread, page-7492

This will be fun.

There is a big difference between the price of a share and the value of a company. Markets very rarely value anything correctly, least of all stock markets. A market simply prices them, it does not value them. Markets are generally always wrong when it comes to valuations, but they price according to the prevailing wind at the time. This is is easy enough to prove. Pick a week where there is no fundamental changes, either with the company or macro's. By nature this would mean that the underlying value of the company should not change. However the price is all over the shop. Price is an absolute at any given point in time, value is significant harder to calculate.

This is where astute investors are the biggest winners of anyone in financial markets. If one can see that the price of an asset is significantly lower than the value of the asset then that's where future wealth is created. When price is higher than value, it's generally smart to bail, at least temporarily.