Value Trap are investments that are trading at such low levels and present as buying opportunities for investors, but it's very important for an investor to be aware of them. A value trap is an investment that has been trading at a premium or discount to its intrinsic value. Since the high-$/low-$multiple is usually accompanied by extended periods of low multiples as well, value traps often make up a significant portion of an investor's portfolio.Value traps are investments that are trading at such low levels and present as buying opportunities for investors but are actually misleading. A value trap can be bought at a price much lower than its intrinsic value, which is called “value trap discounting”!Value traps are investments that seem appealing because they appear to be cheap. However, value traps can be misleading and often lead to losses for investors.
