The Valuation : Value Investing Through Valuation

Palantir (PLTR) has seen its share price drop over 5% on multiple days recently.

After a sharp rally driven by AI hype, the stock is now facing an equally sharp pullback.

At moments like this, you often hear:

“It’s dropped so much—it must be cheap now.”

But the market doesn’t work that way.

Blindly applying the formula “price drop = buying opportunity”

can lead you to double down on a stock that’s still overpriced.

Personally, at around $15, PLTR looks expensive in the short term.

To be clear—I respect the company’s long-term vision and its technological edge.

Their positioning in AI infrastructure, government contracts, and data platforms shows real potential for scalable growth.

But the current price level, fueled by market optimism, has likely over-discounted future growth.

Looking at valuation vs. actual earnings, PLTR remains in overvalued territory.

And in a market where trillions of dollars move daily,

“gut feeling” is a dangerous basis for buying.

Frankly, I wish I could trade options on Palantir.

Due to professional restrictions, I can’t engage in derivatives trading.

But mentally, I was already buying puts last week.

Had I been able to act on that, this pullback would’ve generated a strong return.

That alone tells me: PLTR is overheated—at least in the short term.

Of course, long-term investors may see things differently.

From their perspective, this dip could be a discounted opportunity.

But here’s the key question:

Can you stand behind your decision?

If you bought because of a 5% drop and thought “it’s cheap now,”

What’s your reasoning?

Emotion? Or data?

Investing based on emotion leads to discomfort.

Investing with reason brings peace—and usually, profit.

One of the most repeated mistakes in the market

is confusing price decline with value.

Buying high and selling higher only works in bull markets.

In times of correction, you must soberly evaluate the gap between price and intrinsic value.

Right now, even after a pullback, Palantir still looks expensive.

A falling stock isn’t automatically a buying opportunity—

sometimes, it’s a moment to pause and be even more cautious.

Which brings up something that’s been on my mind:

We need a book that addresses stock investing mindset.

For those who:

Don’t check earnings reports Don’t know what a P/E ratio is And rush to buy just because “it’s down”

It’s time to clearly explain:

Why a falling price can still be expensive How to survive the battle between emotion and logic

Because that’s where real investing starts.