Where did I learn that stocks are cheap and expensive but not expensive?
I learned from Mark Minervini’s book.
“Expensive things are actually cheap.” – Mark Minabini

Book scrap #MarkMinabini

“Leaders in the high-growth phase are always looking expensive. It makes good sense to value a fast-growing company more than a slow-growing company. Even Wall Street cannot accurately evaluate its value because it is growing so fast. As a result, big opportunities arise when stock prices are set inefficiently. As long as a company continues to significantly increase its sales and operating profit, its stock price is bound to follow. Over time, if not immediately, the stock price follows the rate of operating profit growth. As a company increases its operating profit quickly, it is more likely that its stock price will follow.

However, what should not be misunderstood is that stocks of high-growth companies carry significant risks. Wall Street punishes high-growth companies if their performance falls short of expectations. High-growth companies die and live on the prospect of performance. Therefore, we must continue to exceed consensus estimates. If better-than-estimated earnings are announced, the goal to overcome next increases. Then, in the end, the goal becomes too high to cross. However, as long as we achieve solid performance and meet expectations well, stock prices can skyrocket and PER multiplexes can increase. Therefore, when operating profit growth rises, we must aim to identify and invest in leading stocks relatively early.”

, Mark Minervini