Value investors make a habit of relating price to value.
They recognize that stock markets rise and fall.
The prices of individual stocks likewise swing widely.
In the case of stocks and stock markets, a bull exhibits excessive optimism, a bear excessive pessimism.
Dreary rationality, where value investors live, lies in between.
There are stocks priced above what the underlying business is really worth and stocks priced below that.
While over long periods of time the process evens out, the ideal strategy is to search aggressively for investment prospects priced below value.
Also read: 10 TENETS OF VALUE INVESTING
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