r/investing Apr 30, 12:49 PM
The difference between “expensive” and “overvalued” is where most mistakes happen One thing that comes up a lot is whether a stock is “too expensive.” But expensive doesn’t always mean overvalued and that distinction matters more than people think.
A company can trade at high multiples and still justify them if growth, margins, and demand continue to support the valuation. On the other hand, something that looks cheap on paper can stay cheap if there’s no catalyst or if the business isn’t improving.
The problem is that it’s much easier to label something as “overpriced” than to understand why the market is willing to pay that price. That’s where a lot of missed opportunities come from.
Understanding what’s already priced in and what isn’t is often more important than the raw valuation number itself.
submitted by /u/Prince_reaper13
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