it's cheap because it's riskier. The risk may or may not pan out - if it doesn't, you make a high premium on taking the risk. But make no mistake, a cheaper stock is the market indicating that the stock is risky. The alpha of investing is to know when the market may have mis-priced the business.
it's cheap because it's riskier. The risk may or may not pan out - if it doesn't, you make a high premium on taking the risk. But make no mistake, a cheaper stock is the market indicating that the stock is risky. The alpha of investing is to know when the market may have mis-priced the business.