You look to buy "deep discount" Stoney? You mean Stocks which the Market has sold off? Isn't that risky? The Market (Institutions) usually have more Fundamental knowledge than the Retail, so those discounted Stocks are usually cheap for a good reason, meaning they are usually unlikely to rebound much in the near term?
Hello Darc.
Couple comments. One the market does not have more fundi knowledge if you yourself dig.
I can assure you in every meeting I have had at the HF I have had an angle on a name they have not.
You would be surprised how much copying is being done at high levels of finance. Stocks are not cheap for a good reason they are usually cheap because of interest rates and bond levels. Those are adjustable inputs and have nothing really to do with earnings.
As a chart reader: One of the most basic things to learn is when a name is washed out. The easiest money is always the first money... then people will clue in and the buys meet the sells.
I think of GE as a good example. Buying out of favor names will usually find you in front eventually if you have done your research. As well there is the bounce effect when a stk becomes oversold. Why do those bounces work so well? Well the willing sellers have already sold... the ratio then at this price is tilted more towards new, different money coming in.
Every stock has it's own story and it's own way of moving: but in general if you keep a list in your head of quality names and buy them on days of distress earnings misses etc. You will be
getting yourself excellent entry points. They call this Behavioral Value<-------- and I have made a point of being very good at isolating these type of names.
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