🔎Buy Value Stocks-“Price Is What You Pay, Value Is What You Get” ➡️ What Exactly Is Value❓My 2022 Lesson 3

Welcome to Lesson 3 & the Final Part of my 2022 investing review as we we wind up 2022❣️ First up, I wish All 🐯 staff & fellow 🐯🐯🐯 Happy New Year’s Eve🎉 & Blessed 2023🧧🧧🧧

2022 has been an unusual year for stocks due to unexpected macroeconomic events & this has changed my investment perspective significantly. As part of my investing review 2022, I would like to share my experience about some famous investment quotes. When I 1st started investing, I followed the principles of these famous quotes but 2022 has given me real life experiences showing me that these principles are not the be all & end all to investing which many of us 🐯🐯🐯 believe them to be…Following these famous quotes to the T would have caused us significant losses🧐😧😵‍💫 I hope that by sharing my experiences & supporting it with a real stock example, it might help my fellow 🐯🐯🐯, especially newbies to have a new perspective of these quotes🤓

As previously high-flying megacap technology stocks & other interest-rate sensitive assets crumbled, $NASDAQ(.IXIC)$ Bearish $S&P 500(.SPX)$ BearishValue Stocks Outperformed this year, sending the Dow to its biggest calendar-year outperformance VS the Nasdaq since 2000🥳😨🤔 The BIG QUESTION: What Exactly Is Value🔍❓

The 3rd & last investment idea I am going to challenge in 2022 is “Buy Value Stocks” & another Famous quote by Warren Buffett himself “Price Is What You Pay, Value Is What You Get”🔍 We often see this investment advice of “Buy Value Stocks” on the internet but will applying this quote in our investing make us rich like Buffett❓Let’s find out together🕵🏻‍♀️🕵🏻‍♂️

Applying Idea & Quote of Value Investing Wrongly⁉️

The clearest way to think about this is to look at the Price to Book ratio (P/B) of a stock as it measures how a stock is priced relative to the book value of the assets of the company.

➡️ A P/B of 1.0 means that the stock is priced exactly equals to the book value of its assets;

➡️ A P/B less than 1.0 means that the stock is underpriced;

➡️ a P/B above 1.0 means that the stock is overpriced.

🔎 In order to understand what the actual ‘book-value’ of a company, you can divide the current price of the stock by it’s P/B ratio to calculate the value of the company’s underlying assets. At the time of writing, the price of MSFT was $241.01 with a P/B of 10.35. This means that the ‘book-value’ of MSFT is actually $241.01 divided by 10.35 = $23.29/share‼️

😱 The price that you pay for MSFT is $241.01 but the value you get is only $23.29😱😱

😨💡 Is it because we have been buying extremely overvalued stocks so our portfolio is 🩸🩸🩸 now❓

🤔 Fundamentally, value investors should be looking to buy a stock with a P/B as close as possible to 1.0 to achieve the greatest value. BUT, the BIG FAT BUT, is if you ONLY BUY REAL-VALUE stocks, you would have MISSED MANY Profit-Making Opportunities💸💸💸

Applying Idea & Quote of Value Investing Correctly💵💵💵

Are you shocked to know that Buffett himself buys overvalued stocks like AAPL & TSM❓

➡️ If you follow P/B strictly, then you won’t be buying any popular stocks in the tech sector e.g. META, GOOGL, AMZN, NFLX, MSFT, AAPL‼️

➡️ If you choose the “Most Reasonably Valued” tech stock, you would buy META (P/B of 2.58) over AAPL (P/B of 40.78), as AAPL is wayyy too overvalued…

➡️ In the Semiconductor industry, AMD is a better value stock as compared to TSM & NVDA.

➡️ In the EV sector, XPEV & NIO are actually trading way below book value‼️

XPEV at price of $9.88 has a P/B of 0.22, so its book value is actually $44.91/share🥳🥳 NIO at price of $9.99 has a P/B of 0.56, so its book value is actually $17.84! 🤔 TSLA looks cheap now at $121.92 but its P/B is actually 9.65 so TSLA is actually still way overvalued‼️

$XPeng Inc.(XPEV)$ 

$NIO Inc.(NIO)$ 

$Apple(AAPL)$ 

⭐️⭐️⭐️ Verdict: ⚖️Balance is the 🔑 to Making 💵💵💵 in the Stock Market❣️No longer do investors buy stocks based on the true value of a company, they buy based on excitement😓😓😓 To ensure that we don’t get 🔥🔥🔥 by excitement or lose out by buying stocks with P/B close to 1, we need to find the nice ⚖️ in between🤓

🥁🥁🥁 Conclusion:

(1) On paper, we should all be buying Value Stocks as they outperformed in 2022‼️ However, even the Greatest Value Investor in the 🌎 Warren Buffett who quoted this saying “Price Is What You Pay, Value Is What You Get” doesn’t buy stocks based on their True Value as well…If not, Buffett would have bought AMD over TSM, & Meta over AAPL, but he didn’t😝 To apply this principle of “Buy Value Stocks” to help us make profits in 2023💵💵💵, we 🐯🐯🐯 should buy a popular stock that has a great future, healthy financial health, & proven track record of making profits with a lower P/B ratio among its peers (it doesn’t have to be close to 1.0)❣️ Investing is highly complicated so let’s continue to increase our investing knowledge & share them with fellow 🐯🐯🐯❣️

(2) Many people just cherry-pick what Buffett says in public, then propagate it blindly as Investing Truths without considering what he actually does in real-life😅 I hope that my 3 posts challenging popular investment quotes will help you gain a new investing perspective & rethink how we have been following media blindly while investing…can actually make more 💵💵💵 in 2023🤓

Fellow 🐯🐯🐯 do share your thoughts & experiences in the comments section🤓 Please also help to click on the “Like” & “Share/Repost” buttons at the bottom right corner so that more 🐯🐯🐯 can access this information, many thanks🤗🥰

As usual-🤔💭 Consider POV & Actions of investors + 👩🏻‍💻👨🏻‍💻 Research + 🗑FOMO & Greed = Investing Wisely 🤓🤗 + Accumulating Wealth 💵💰

⭐️⭐️⭐️ If you haven’t read Part 1 & 2, you can Click on the Snoopy icon to reach my homepage & find my post on:

(1) 29/12 ➡️ 🔎Time In The Market Beats Timing The Market – Not So True⁉️ My 2022 Lesson 1

(2) 30/12 ➡️ 🔎Be Greedy When Others Are Fearful-Maybe Not⁉️ My 2022 Lesson 2-Hope Newbies Will Benefit From This🤓

@TigerStars @CaptainTiger @MillionaireTiger @TigerEvents