Advanced Automatic Investor

[byculla]

fundamentally solid stocks that have been undervalued by the markets will come back to their intrinsic values

I've had some stocks go up almost immediately after purchasing them and others not do anything for 2 years

Buying undervalued in a overvalued market might mean a long wait for the stock to gain it's intrincic value for in the meantime the market could cycle from overvalued to undervalued. Whereas buying unvervalued stocks in a undervalued market might see a far quicker recovery of value.

One then has to identify a way to define the status of the market and the tipping point on it's journey from one state to the other.

In an overvalued market it would make more sense to sell overvalued stocks as they too would move back to their intrinsic value. The ying/yang concept. And this would make even greater sense in a long term cyclical bear market as I suspect we are in at present.

So though I entirely embrace the value investing methodology, the term value does not mean just cheap or undervalued. It is a relative word. I wonder how Buffett would have done if he had been a value switch hitter. Only backtesting of this will enlighten us.