Bill,
Re:
There is always a reason a stock gets beat down.
Yes. But I don't take the following reasons as valid reasons not to buy the stock (in fact I find them good reasons to do the opposite):
a)the cycle is down so sell the cyclicals to absurd levels
b)the nifty 50 and internets are in, so sell your small caps
c)you've lost big in a stock so sell to pay less taxes
d) your stock didn't perform well this quarter, so join the institutions in selling to window-dress
e) the outlook is poor the next two quarters so sell as a proxy for pre-emptive window-dressing
f)a beaten-down stock gets more beaten down out of frustration (e.g. Midway)
Oil, commodities and farming are no doubt facing horrible outlooks. No doubt these industries are prone to devastatingly long and deep recessions. However, given your stated style -
"Short to mid term in companies I think will pop. -
I find it hard to take you taking us to task seriously. Playing the sentiment surrounding 1 or 2 quarter earnings fluctuations may be your game, but to me does not constitute a sound, safe investment strategy.
Some of the posts on this thread from seemingly sound individuals have struck as something I might read in Barrons, that noted barometer of popular sentiment. Mattel should be avoided because Barbie is out. Oil should be avoided because there is no near-term good news expected. These statements strike me as asinine, and reflect the growing frustration among value investors, who, like Jeffrey, are doubting their strategy.
This only leads to less support for the most undervalued situations. I'll continue to scoop them up as long as I can.
The fundamental flaw with your advice IMO seems to be that you believe we can accurately predict the timing of both the fall and the redemption. Moreover, you would like to do it on terms lasting less than 6 mos or so.
The flaw in me, which I recognize, is that I can't do that reliably. So I'll stick to investing in the spirit of Graham rather than Pilgrim.
Mike |
