4.+Valuation

=Valuation= Valuation is a critical part of successful investing. You probably have never placed a value on something because it is already done for you when you shop in stores. Consumer items like jeans, pizza, and every other item has a price. You decide if the price (or valuation) is fair. If the price of a pair of jeans is fair to you, then you buy the jeans. If you think that the jeans are __//overpriced//__, then you choose __not__ to buy them. Valuing stocks is much more complicated than buying jeans or a pizza.

Future
Valuing stocks is difficult because it involves the __future__ and __uncertainty__. By comparison, the pizza in the above example will be eaten very soon. The jeans will probably only be worn for a few months. These are relatively short periods of time. In addition, you are buying stocks to **__make money__**. You buy jeans and pizza to satisfy a need or a desire.

Valuation Techniques
There are many ways to value a stock. The technique we will use....