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39 votes
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China’s CATL, the world’s biggest electric battery maker, starts trading in Hong Kong this week, after a $4.6 billion IPO, the biggest so far this year
10 votes -
Growth vs. value stocks
One question you can ask yourself before you invest in a company: why do I think the value will increase and provide a good return on my investment? One reason is because the company is poised to...
One question you can ask yourself before you invest in a company: why do I think the value will increase and provide a good return on my investment?
One reason is because the company is poised to grow at a rate above the overall market. These are called growth stocks.
Another reason is because the company is valued lower than it should be right now based upon a fundamental analysis of its fair market value. These are called value stocks.
Growth
With a growth stock, the current price may already be high due to strong demand, because people think the stock will be worth much more in the future. That is the risk you are taking, because if the stock does not outperform the overall market, you are now behind.
Having a good knowledge of the market in which a growth stock company operates is very helpful. There may be market disruptions (AI anyone?) that lead to outsized expected growth. Look at Nvidia’s 5 year chart. Tell me when everybody figured out Nvidia’s chips were amazing for AI processing.
Or Amazon during the pandemic. Look at this chart and tell me when everybody figured out that if you can’t go to the store to buy things, you are going to need to order it online.
These companies were sitting in a market that, for whatever reason, had amazing growth potential. The companies were able to use their core strengths to jump ahead of the overall economy in terms of value creation speed.
Value
As mentioned, value stocks are those that, after lots of research into the company and market itself, you think the price of the stock should be higher than it is right now. And you expect that stock price to rise as everybody else realizes all the amazing things you already realized.
The stock could have been beaten down by some newsworthy event, which caused everybody to panic sell. These stocks are trading nowhere near their high marks. However, if you think the stock will get back up to that high water mark, you may have found a good value stock.
Now, determining which stocks that have suddenly dropped in value are actually value stocks takes research. You don’t want to “catch a falling knife” by the blade and end up bloody. You want to be able to catch the handle! Does the company have enough cash to weather any storm? Are creditors piling up? Is the photograph printing market shrinking incredibly fast and the company is not making the right decisions? Back to that fundamental analysis of the company itself - if you look at the financials and are impressed with the leadership's team ability to navigate that quick drop in stock value, then you found a winner!
Warren Buffet seems to think United Health is a value stock. As you can see, the stock is about half of its initial value. Buffet is in this for the long term and is hoping that his research is correct in terms of UnitedHealth potentially doubling back up to its previous value faster than the market as a whole would double. Either that, or he hopes his clout is enough to make it a value stock in that more people will invest just because he did.
Holy cow done
That about wraps up the difference between these two types of stocks. Many stocks are a blend of the two, also. But seeing the extremes helps with understanding this way to differentiate stocks. Yes, there are more specifics that I didn't fully get into. And yes I am trying to be as approachable as possible with the topic. Hopefully this helped you!
Can you find an example of a potential value stock out in the world currently? How about a potential growth stock?
20 votes -
Investment club?
Any interest in forming an investment club? We would meet regularly (TBD), learn techniques from each other, pass on knowledge and experience, and present our individual analysis. The chair would...
Any interest in forming an investment club?
We would meet regularly (TBD), learn techniques from each other, pass on knowledge and experience, and present our individual analysis.
The chair would keep people on track in between meetings, encouraging the hard work of spending your own time researching duds in the hopes that one of us finds a potential gem for us all to enjoy.
Theoretically, we would want to research company stocks that are easy for all to buy, so I would be interested in a group based upon major US indices. However, this thread could potentially be used by others to form their own group buying from other markets.
Edit: alright, I'm sending direct messages to those who expressed interest in wanting to contribute. Those who expressed interest in learning will potentially be able to learn with however the group decides to communicate to Tildes.
If you are interested in participating, you can leave a comment here or send me a message for now. Thanks!
44 votes -
Swedish financial technology company Klarna announces launch of its initial public offering, months after the firm paused its planned listing
7 votes -
Chinese property giant Evergrande delisted after spectacular fall
19 votes -
The hater's guide to the AI bubble
66 votes -
Novo Nordisk shares plunge 20% after Wegovy maker names new CEO and cuts full-year guidance
10 votes -
Jane Street barred from Indian markets as regulator freezes $566 million over Nifty 50 manipulation claims
28 votes -
How does tiny Denmark defy the odds to become one of the richest nations?
7 votes -
EU needs single regulatory framework and to break down fragmentation across its business, tax, debt issuance and securities law systems, according to Norway's sovereign wealth fund
15 votes -
Klarna’s losses widen after more consumers fail to repay loans
38 votes -
Novo Nordisk CEO Lars Fruergaard Jørgensen steps down amid growing competition for weight loss drugs
11 votes -
Can you run a company as a perfect free market? Inside Disco Corp.
15 votes -
The stock market loves Bitcoin
9 votes -
You are witnessing the death of American capitalism
36 votes -
Does anyone want to talk about stocks/options?
Just curious since the recent DeepSeek panic. What do you like? Companies/ETFs? What do you do? Buy and hold/Trade/Options (Calls/puts, LEAPs, spreads)? What areas do you think will see massive...
Just curious since the recent DeepSeek panic.
What do you like? Companies/ETFs?
What do you do? Buy and hold/Trade/Options (Calls/puts, LEAPs, spreads)?
What areas do you think will see massive change (gain/loss)?
Pretty sure this is my first or second topic post, so apologies if the opener is too short.
34 votes -
Norway's sovereign wealth fund posted a full-year profit of $222.4 billion – returns were driven by the AI boom that drove tech stocks higher in 2024
7 votes -
Nvidia’s $589 billion DeepSeek rout is largest in market history
37 votes -
Why global bond markets are convulsing
7 votes -
US mortgage rates back to 7%
26 votes -
Norway's $1.8 trillion wealth fund issues stock market warning – heightened uncertainty and concerns over the economic outlook mean that stock market risks are tilted to the downside
9 votes -
Dow Jones drops 864 points, and Japanese stocks suffer worst crash since 1987 amid US economy worries
50 votes -
Japanese stocks rebound after global sell-off; US futures edge up
19 votes -
ETF’s are eating the bond market
18 votes -
Does market failure justify government intervention? (with Michael Munger)
5 votes -
Berkshire was too cheap, then too pricey
9 votes -
We live in a system of capitalist oligarchy
35 votes -
Experimental real property tax basis-set rate based on usable area per person
Random thought. What if we taxed property based on the area per person of the property, as opposed to sale value? Edit and quick intro to those who mostly rent: most real property in the US,...
Random thought. What if we taxed property based on the area per person of the property, as opposed to sale value?
Edit and quick intro to those who mostly rent: most real property in the US, especially residential property, is taxed yearly based on some variation of something called "fair market value," usually assessed by a local tax assessor's office
I'm proposing that a property would be taxed for every square meter of space per person in the designated property unit. It can't be totally simplified, but should be fairly straightforward. There could also be progressive brackets. It might not make make sense to apply it strictly per person, but rather for a typical use. That is, we would assume "single family residential" properties to house 3.4 (totally made up number) people per house and property.
The goal of this is to find a fair, market-driven incentive to build density into urban cores.
A similar approach could be applied to commercial space (but probably not industrial).
It could be coupled with a sales tax (currently missing in most real property tax regimes, at least in the US) to capture runaway property valuations in certain jurisdictions.
Alternatively, we could drop the property value based tax rate (but not eliminate it), and then add a per person-area surcharge.
It's not meant to increase revenue, although it could certainly be used that way. It could also be use to decrease revenue, and maybe that would be a good way to sell it. But at the end of the day, developers and residents would both have an incentive to pursue as dense development as possible, even if there is not a density driving pressure of desirablity, which only exists in a few really cool urban cores.
8 votes -
The US Federal Reserve fears a bond meltdown
6 votes -
Cocoa price swings are the craziest since the 1970s
14 votes -
US Federal Reserve’s Jerome Powell ready to support job market, even if it means lingering inflation
7 votes -
Why small developers are getting squeezed out of the housing market
18 votes -
(Former Morgan Stanley chair) Stephen Roach: It pains me to say Hong Kong is over
17 votes -
US markets get ready for risk-free Federal Reserve arbitrage trade to expire
4 votes -
Can Denmark's world-beating drugs maker Novo Nordisk stay ahead after Wegovy propelled them into the big league?
8 votes -
"The secretive industry destroying the economy" (it's private equity)
16 votes -
‘Winning requires hard work’: Wayfair CEO sends employees a gloomy pre-holiday email following layoff-filled year
27 votes -
A banking relationship, dementia and a loss of $50 million dollars lead to a US lawsuit against JP Morgan
3 votes -
In the wake of substantial growth, Novo Nordisk's stock price climbs to near-peak levels – investors are asking whether the stock is now hovering in overvalued territory
6 votes -
According to Internal Revenue Service leaked US data Warren Buffett sometimes privately traded stocks that Berkshire Hathaway was buying and selling
14 votes -
Klarna reports first quarterly profit in four years – swing to profit of £9.6m by Swedish firm improves its fortunes in run-up to possible £12bn flotation
9 votes -
Norway's $1.4 trillion sovereign wealth fund, the world's largest, on Tuesday reported losses of 2.1% in the third quarter, as all asset classes fell in value
10 votes -
Investors can't get enough US debt as Treasury bills are bought at a record pace
16 votes -
Bank of America has $100B in unrealized losses
9 votes -
Social media as a bank run catalyst
8 votes -
A theme park crisis is wrecking South Korea’s bond market
3 votes -
Inside the crypto black markets of Argentina
4 votes -
How prisoners in America got into stocks
14 votes -
The stock market kinda wants a recession
10 votes