Value Investing Fracking Stocks Less Popular Than When Oil Was $10 |
- Fracking Stocks Less Popular Than When Oil Was $10
- How do value strategies outperform during bear markets?
- To Err Is Human (Biases in Investing)
- 9th Annual LD Micro Invitational Presentation Schedule June 4-5th 2019
| Fracking Stocks Less Popular Than When Oil Was $10 Posted: 30 May 2019 08:23 PM PDT |
| How do value strategies outperform during bear markets? Posted: 30 May 2019 04:41 PM PDT Excuse me if this question seems a bit silly. I've been thinking about this more as the market gets more jittery and as friends have lamented that there don't seem to be as many open job opportunities at hedge funds compared to 2017. I admittedly don't have much experience within the markets outside of investing in my own PA these past couple years and through reading. Apologies in advance if the below content is a bit scattered or if this belongs in the Q&A thread. Ideally, investors would have some dry powder to capitalize on cheaper prices after an inflated market, but pure cash on the side has no return. Assuming that investors are fully allocated (which many seem to be), they may not have the luxury of having the free cash to scoop up these opportunities. Additionally, since value investing attempts to find cheap stocks relative to intrinsic value with ideally a margin of safety to a price target, it's still possible (though potentially difficult) to find undervalued securities and fully invest. But if we were to experience a sudden downturn in the market, how does that value ultimately get realized? It's been said that in bear markets, value outperforms strategies like growth, momentum, etc, but during a bear market, multiples also contract across the board. I understand that value is a play on the convergence of price to value, but if a downturn causes positions to drop, how does that convergence happen? Mathematically, if the price were much lower than a cost average and the investor has no cash left to average down on those positions, the stock has to both claw back to the breakeven point and then some to reach the target price. Is it a matter of waiting for the market to realize that value eventually, a matter of value being superior at stock selection such that they don't experience as dramatic a drop in their positions, or something else that I'm missing? [link] [comments]  |
| To Err Is Human (Biases in Investing) Posted: 30 May 2019 05:51 AM PDT |
| 9th Annual LD Micro Invitational Presentation Schedule June 4-5th 2019 Posted: 30 May 2019 01:32 PM PDT |
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