Value investing is about buying stocks selling at a discount on their intrinsic value. How do we find such stocks?
The simplest way to look for undervalued stocks is to use a screener, where you put the metrics you want to find in a value stock, for example, a PE ratio of less than 10. But I'm not really a fan of using screeners but I do use those build by others. Always do your research and don't rely solely on screeners.
Another way to find undervalued stocks is to watch the news and do the opposite of what they are selling. For example, in 2016, I bought Apple $AAPL when everybody was bearish on Apple because iPhone sales were down. But it was a value stock with PE ratio of 10. In 2018, Facebook $FB crashed after the Cambridge Analytica scandal. This was another buying opportunity. This year, I invested in Discovery $DISCA after the margin call on Archegos Capital.
You can also follow what other investors are doing and sometimes you will find great opportunities. For example, in 2019, when Michael Burry was investing in GameStop $GME I saw the opportunity with this stock as it was a deep value stock on a brink of a short squeeze.
The best way to find undervalued stocks is to look at industries, sectors, and countries that are in a bear market for some reason. For example, last year was bad for airlines and I invested in Alaska Airlines $ALK .
Watch the full video on YouTube: https://www.youtube.com/watch?v=ZHzj2Q-DlnE&list=UUPO3uUyoXSaFWG-Ldq1mqEQ&index=2
Full analysis of Discovery: https://ishfaaqpeerally.teachable.com/courses/662813/lectures/32475061
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