I often blog about how the so-called stock market can misprice stocks. It is not uncommon for the market to overvalue or undervalue a company. Usually these inefficiencies correct themselves very quickly. Sometimes they take longer to fix.
In my opinion, when the market overvalues, risk is higher. On the other hand, undervaluation mitigates risk. Today’s video looks at a high quality company that has been overpriced for many years.
Best when viewed in full youtube screen.
Valuation plays a major role in the long-term returns you can expect from a stock. It has a major impact on risk as well.
The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.