>>That's a problem that most value investors have, including myself. We tend to buy into declining stock price trends, but in some cases, the declines are just the beginning where people realize that the fundamentals have shifted.
Exactly !!!!!!!!!!!! That is definitely a value investor. " We are so smart and the market does not understand. When the market wakes up, my stocks will go back up to a fair price. I can wait. Or maybe I should by more right now...." Been there, done that. Will do it again too. (however, I've been right a few times too.)
Relatedly -- a friend of mine, who lost his shirt in E&P MLPs (like buying 12,000 BBEP at $20, and 5,000 MEMP at $20) admitted that he does not understand energy as much as he should. I told him that he understand as much as anybody. He knows that when crack spreads improve, refiners do well. When oil prices increases, E&P do well. I contend that no one knows what crack spreads or oil prices will do. It is (perhaps) silly to think that others are more knowledgeable. Many brilliant hedge funds, and legendary industry CEO's, did not see it coming. Putin doesn't know any more about oil prices than my friend, or any of you.
grommit
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