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Strategies & Market Trends : Value Investing
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To: Bob Rudd who wrote (16700)3/30/2003 1:48:19 PM
From: Paul Senior   of 78702
 
Bob Rudd, imo you raise some good points regarding investing in value stocks. So many times value opportunities or traps appear with companies in the throes of problems.

Apparently each value investor has to determine for himself/herself how to deal with this. Perhaps "raising the bar" or studying financials to eliminate potential catastrophes is one way. Or (and) if after purchase, heightened awareness and a quick exit if there's an appearance of red flags (massive insider selling, unexpected accounting issues or questions regarding management, etc.). The thread has severeal times talked about the pros and cons of setting sell stop orders 10-20% below purchase price.

I need to do some more reflecting in this whole area; some of my assumptions might be faulty. I am willing to accept ownership of a couple of disasters (I seem to have every one that comes along though!) if that means I also purchase similar problematic stocks which rise in values as their companies resolve the issues that had dropped the stock price. I assume that the winners will gain more than the losers lose. That's been hard to see or justify for me in this current market, where so many stocks have come down near lows and seem to be staying there (or dropping further).

Paul Senior
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