Myer’s new strategy continues to show signs of success. So why did so few investors spot the opportunity when it was available? Not only is there an evolutionary impulse to follow the crowd, in investing at least there’s also a pay off: you may not achieve extraordinary returns but nor will you suffer extraordinary embarrassment. Myer is one recommendation that could have caused us significant embarrassment but is so far delivering on its promise. The fact that we were prepared to accept that possibility and recommend the stock anyway is a good example of what value investing really entails. Without a herd mentality, value investing would not produce the range of opportunities it does. But because falling share prices frequently lead to panic selling, stocks can become far cheaper than they’re actually worth. Conversely, investors will often jump in and buy stock in a company enjoying a share price spike. Read full text here: (VIEW LINK)
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