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Vinvesting.com is the leading social networking site for value investors where you can get the latest investment ideas, insights and interviews from great investors like Warren Buffett, Templeton etc. Over the last 70 years, value stocks clocked a 13.4% average annual return, vs. 10.2% for growth stocks, according to Ibbotson Associates. |
Value traps killing off value investing
Submitted by admin on Mon, 11/17/2008 - 10:28
Value investors deny that the market is efficient. In their view, stock prices are subject to irrational waves of optimism and pessimism. That’s mostly true. But just sometimes, the market’s mood isn’t too far off. A value trap appears when a falling share price correctly anticipates a company’s deteriorating fundamentals. Over the last year, some of America’s best investors have been misled by apparently cheap prices into buying financial stocks. The worst may not be over. If the economy goes into a deep recession, investors could face the greatest value trap since the Great Depression.
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