Understand the difference between price and value from "summary" of The Little Book of Value Investing by Christopher H. Browne
Price and value are two concepts that are often conflated but are fundamentally different in the world of investing. Price refers to the amount of money you have to pay to own a certain asset, such as a stock or bond. It is the number that you see quoted on financial news websites or trading platforms, and it is what most people focus on when making investment decisions. On the other hand, value is a more subjective concept that is determined by the intrinsic worth of an asset. It is based on the underlying fundamentals of a company, such as its earnings, cash flow, and growth prospects. Value is what savvy investors focus on because it allows them to identify opportunities where the price of an asset is lower than its true worth. Understanding the difference between pr...
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