I just reviewed something that many investors overlook: the difference between how a stock is actually valued and how we believe it should be valued. Three numbers, three completely different realities.

Let’s start with the basics. Par value is that starting price that almost no one uses, but it’s still important to understand. It’s calculated by dividing the share capital by the number of shares issued. It sounds simple, but it’s the initial point of reference. A company issues shares with a par value of, say, 13 euros. That number is there—fixed—since day one. But here’s the interesting part: that par value is practically useless for trading. It’s more of a historical datum, an anchor left behind.

Then there’s book value, and this one is the one that truly sparks conversation in serious investment circles. It’s calculated by taking the assets, subtracting the liabilities, and dividing by the total number of shares. This gives you an idea of what’s really in the company’s books. It’s what value investors like Buffett use to look for opportunities: companies with a solid balance sheet but a low market price. If a gas company trades at a Precio/Valor Contable ratio lower than its competitors, it may be cheaper in terms of what it actually owns.

But here’s the problem: book value falls apart completely with tech companies and small businesses. Why? Because many of their assets are intangible—they don’t show up on the balance sheet. In addition, there is such a thing as creative accounting, and sometimes what you see in the books isn’t exactly what’s actually there.

And then there’s market value. This is the one you see every day on your screen—the one that makes you gain or lose money. It’s the price at which buy and sell orders meet. This is where reality turns chaotic. The market discounts expectations, news, interest rate policies, and sector sentiment. Sometimes that price has little to do with what the company is truly worth. An announcement of an aggressive monetary policy can drag down a stock that fundamentally hasn’t changed anything. Sector euphoria can inflate it without any apparent reason.

So we have three completely different values. Par value tells you where everything started. Book value tells you what it should be worth according to the books. Market value tells you what’s happening right now in the market, influenced by a thousand factors beyond the company’s control.

In practice, par value matters little for equities. Book value is useful if you’re looking for undervalued companies, but it isn’t absolute truth. And market value is what you trade with, but you need other indicators—like the PER or the BPA—to determine whether that price is expensive or cheap.

What I’ve learned is that there is no single number that tells you the truth. You need all three, but applied in the right context. If you focus on just one, you miss the whole movie. Investing isn’t a one-level video game; it’s more complex than that.