The Valuation : Value Investing Through Valuation

Chasing Countless Methods vs. Focusing on What Matters

Many investors search endlessly for ways to make money in the stock market.

Some dive into chart analysis, while others rely on stock tips from acquaintances.

But in reality, only two things are truly necessary for success in stock investing:

A clear valuation framework, and The discipline to stay updated with daily financial news.

Valuation: The Lens Through Which to See Company Value

Valuation is the process of assessing a company’s worth—not simply looking at a stock’s price, but determining whether that price is cheap, expensive, or reasonable.

Just because a stock price drops doesn’t mean it’s cheap, and just because it rises doesn’t necessarily mean it’s expensive.

Profitability, growth prospects, industry position, and cash flow all need to be considered. Only then can an investor confidently say, “At this price, it’s worth buying.”

Without a valuation framework, investors are easily swayed by emotions: selling too quickly when prices rise out of fear, or panic-dumping when they fall.

With a framework, however, one can stay grounded amid market noise. That is the first key to long-term profits.

The Discipline of Reading the News Daily

The second factor is surprisingly simple: cultivating the habit of reading financial news every day.

Markets are influenced by countless variables—interest rates, exchange rates, economic data, and geopolitical risks, to name a few.

Understanding these dynamics requires at least some contextual awareness.

There’s a reason fund managers and equity analysts follow economic news daily: without the big picture, analyzing individual stocks is like staring at trees without seeing the forest.

Only by following market trends can you anticipate how the market will value a company’s fundamentals.

The Essence of Investing Is Simple

Stock investing is often perceived as complicated, but its essence is straightforward:

The ability to assess a company’s value, and The discipline to track market trends consistently.

By focusing on just these two principles, investors can avoid reckless trading and baseless bets.

Conclusion

If you want to make money in stocks, start by building your valuation framework.

Then, develop the simple habit of spending at least 10 minutes each morning reading financial news.

Though these two steps may seem simple, few investors actually follow them consistently.

In the end, those who survive in the market are not the ones chasing complexity, but the ones who remain faithful to principles.