>>What else should I do, and where else should I look, when searching for and evaluating value stocks?<<
Here is what I do:
1) I follow several investing threads. I get many of the best ideas from other posters.
2) I use screener every once in a while. I also work a lot with yahoo finance even though they work hard on making it less and less useful.
3) I identify themes or sectors I want to be invested in and then try to find stocks to buy - anywhere in the world (Japan, Europe, US etc.)
4) I try to find special situation and invest in stocks that are beating down due to temporary impairments
5) I keep an eye or two on macro.
I think psychological contrianism is OK but can be dangerous. Contemplate the following situation - you are in a fully occupied movie theater near the exit door and someone cries "FIRE!". You think that there is no fire (but you cannot be totally sure too since the theater is fairly dark. Now what are you going to do - in this case the best thing is often to run for the exit. Why- if you are correct and there is no, you may still get overrun by the crowd that tries to run for the exit. if you are not correct and there is a fire, you are better of running too.
This is simplified of course, but I as an investor always like to think that I am the guy close to the exit - my position are small, relative to daily volume so I can sell or buy at market almost as I wish. The big institutional investors cannot do that - their positions are too large. So, if you think that there may be a calamity (the debt ceiling was a rather good example because it was visible to everyone, it is a good idea to step aside in many cases. I did follow my own thinking but not enough <g>.
I also think that GLD is a similar thing, just in reverse - you are betting on a panic that may entice people to buy Gold. However at this point it is a Momo play and an mature one at that - just remember that when somebody cries fire (or SELL GOLD!). |
