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Value Investors – Beware The Value Traps
Value investors, consider this your warning… With thousands of stocks down 50% (or more), investors are salivating over the bargains. But for every true deal, there are at least three “value traps” – stocks destined to languish at depressed levels indefinitely. Or worse, get cheaper still.
Think Kmart here. In late 2001, it became the poster child for value investors. They argued it was dirt cheap based on countless metrics like book value and sales. And it was destined for a historic turnaround.
Sure enough, the stock went from the bargain bin to the trash heap, as the company filed bankruptcy in…
5Dec2008 | Investment U | 0 comments | Continued
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