The Key To Above Average Stock Market Returns

Many people ask, what is the key to enjoy above average returns in the stock market? Well, I’m going to answer that right here, especially because I wrote a book on the exact same subject.

The key is to understand the difference between price and value.

Malaki ang pinagkaiba niyan.

Price is what you pay for an asset. Value is what it’s actually worth.

You can buy or sell a single piece of yellow paper at a price of Php 1,000 pesos each, but is that yellow paper actually worth Php 1,000? Of course not!

You are able to know that the paper is overpriced, because you understand its fair value. Piso lang dapat yan. 

Or how about this non-monetary example:

Naranasan mo na bang ma-taken for granted? Yung hindi naa-appreciate ang efforts mo. Hindi niya nakikita yung tunay na halaga mo.  🙁    

Kapag ganyan, hindi nauunawaan yung tunay mong value. You have to know your worth!

Bottomline is this:

Price is what people think something is worth. Value is what it is actually worth.  

The key to earn above average returns in the stock market is to find companies that are priced lower than it’s true value.

For example, nakakita ka ng stock na ang presyo ay Php 7.00 per share. 
After careful research, you found out that the stock’s or company’s real value is worth at least Php 20.00 per share.

So that’s when you move in and buy that asset! Because eventually, people will realize the real value of the stock and it will soon reflect in the price.

And when that happens, you profit. Rinse and repeat.

That’s the kind of investing that I advocate for. And I reveal the juicy details of how to spot discrepancies between price and value in my Pinoy Power investing course.

You can get a copy of it here (if you haven’t availed it already): https://www.pinoypowerinvesting.com/course

If you have already availed it, PM me and let me know what you think about the book. I can help you find undervalued stocks in the market every month.