A practitioner's analysis of buying statistically cheap companies

[MHS]

@theashworld

This is a feature and not a bug. The portfolio is clearly high-beta and is intentionally so. In order to buy low and sell high, you need volatility. Value stocks need to go crazy down for you to enter and need to go at least moderately up so that you can part-exit. That is why I wrote at the end the following two points:

I second your thoughts:

I personally experienced the above in the Covid crash in 2 stocks Shaily Engg. and Intellect Design.
Have these stocks from 2015 till March 2020, instead of buying more in the Crash I exited exactly at the wrong time-only to see and miss a 10+ bagger in both stocks.

Lesson learned: Capacity to Suffer.

so how long u hold or have capacity to hold because in small caps the returns are highly non-linear, u can see how a 18 month period holding/exit have exponential returns and Hugh swing in CAGR returns.

@theashworld Thank q for wonderful thread.

Great articles to read on the web

10% of successful stock picking is picking great stocks. The other 90% is not selling them. Stocks rarely perform in the time frames we predict, and it’s why the market only works for investors that have more patience than they thought they would ever need.