Contrarian Value Ideas

[gfp927z]

Derf, >> stocks on the way up <<

Yes, owning something that's already in an established uptrend has the best odds for success. Trying to guess a bottom is dicey at best. But within the broader 'turnaround' category, there are relatively safer situations when the stock has had a long history as a solid long term stock, has formed a convincing bottom, etc. Something like Pepsico being down 15% would be a great bet on an eventual recovery, but it's not really a turnaround, more of a 'contrarian value'. HSY down 30% would be closer to a 'turnaround', and NEE down 50% would be even closer.

But either way, better to not go overboard with these contrarian value plays. As Buffett said - 'the trouble with turnarounds is that they never turn around'. I was surprised to hear Buffett say that though, considering he originally came from the Ben Graham 'cigar butt' school of extreme value investing.




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