Reflections on intrinsic value PT.1

Reflections on intrinsic value PT.1

By bmvtyea | Bernie-flow | 17 Mar 2021


In the investment world, there are several strategies disseminated in a multitude of books and articles. The main two are technical analysis and fundamental analysis.

The first strategy is based purely on the movement of asset prices. Based on data from the past and with the help of statistics, technical analysts try to predict the next rise (or fall) in the short term to win, for example, by buying at a cheaper level and selling quickly at higher prices.

 

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However, according to Eugene Fama's theory of random walk hypothesis, stock price variations are independent of each other. In other words, it is a random process that does not help to estimate the future valuation of assets. It is similar to thinking that, even if a coin makes 10 "heads" in a row, when you throw it for the 11th time, the probability of falling "face" again would be the same as 50%.

In turn, the second strategy focuses on the fundamentals of a company. It basically contains two fronts: value investing and growth investing. As some of you may already know, Suno adopts value investing as a philosophy, so we will delve into it.

In the simplest form, investment in value argues that, in order to invest successfully, one must buy an asset below its intrinsic value and sell it at a higher price.

Many of those concepts can and must be used to analyze a new Crypto project to see where it's going and what are their goals. Important to know the commitment of their developers to its project. Below is a nice example of an image:

 

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bmvtyea
bmvtyea

Young Brazilian newbie in Crypto


Bernie-flow
Bernie-flow

Trying to inspire those who doesn't have some financial conditions, such as myself, to growth a nice portfolio.

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