The core thinking behind finance is a dollar today is more valuable than a dollar a year from now. The art of finding the present value of a dollar a year from now is
discounting the dollar back to present value.
With that said the concept is applied to businesses through doing a
discounted cash flow, where you find the future cash flows a business generates and discount them back to present value terms. By doing this you find the
intrinsic value of a company.
Stocks can be segmented into a variety of categories, one main segmentation is the idea of "value" vs. "growth". Growth stocks are stocks that are usually early in their product life cycle(Tesla), or perhaps been around for a while but still innovate to create new avenues of revenue(Google - which can be value or growth depending on the way you look at it). Growth stocks tend to sell a dream of exponential growth(hence the name) rather than a historic and tangible stream of cash flows. High risk vs. high reward. If the dream falters, the company is worthless.
Value stocks are usually verifiable, they already have a historical stream of revenues, and are profitable. Value investors are usually old school, buffet, graham,etc., The idea, going back to discounted cash flow, is that you buy the company when the stock price is lower than the intrinsic value(buy the company at a "discount").
In terms of market returns, growth stocks have been >>>> value for the better part of the 2000's. I'm saying with a full democratic control political system posing a threat to FAANG, value stock should look rather appealing. But IMO everyone should have exposure in the value category anyway