Monday, March 22, 2010

Confessions Of A Value Investor: A Few Lessons in Behavioral Finance

A must read presentation for the reflexive and reflective traders/investors in all of us. For the crux of the presentation please turn to slides 43-47 which provides a wonderful counterargument to why every time you hear some "expert" on CNBC say you should buy a stock because it is cheap, consider the following just as logical alternatives: 1) fraud, 2) value trap, and most relevantly for our current market situation 3) bubble market.At least $10 trillion in household wealth may have been saved if people followed these three simple observations at the peak of the last credit bubble in 2007. Of course, this time it is different.

Confessions of a Value Investor- A Few Lessons in Behavioral Finance

H/T Joe