The Best of Both Worlds: Value on the Move Screens

    by Wayne A. Thorp

    You don’t need to be a math genius to understand that successful investing consists of buying low and selling high.

    Accomplishing this feat, however, depends a great deal on the strategy and tactics one uses. Numerous studies have shown that value-oriented investing has been better at this than most other strategies over the long term.

    Value investors believe that, while the market may be efficient in the long term, emotions often dictate market prices in the short term. These emotions can overtake rational analysis, pushing a stock’s price above its intrinsic value during periods of “irrational exuberance” and below its true worth in reaction to bad news. In addition, the market sometimes ignores many companies, which also leads to mispricings. Value investors seek to profit from these mispricings. However, it is imperative to have discipline when following a contrarian, value-oriented investment approach.

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