2morrow - He should become a shortseller. He would have made an absolute killing if he had shorted each one of his long picks.
Note: I'm being fully serious here. The "deep-value, super-low P/E" approach doesn't work. You end up buying a bunch of scammy, pump-and-dump stocks that have dishonest management and poor future prospects. The companies are almost guaranteed to have those traits, otherwise the market would not price them at super-low P/E's.
If every stock is at P/E 2, even the high quality guys, as was the case in March 2009, then it makes sense to be a contrarian value player and buy the pain. But if it's just your stock that is getting taken to the cleaners, then it's just crazy to dive in against negative market signals and a very large short interest. You will lose almost every time.
That's a lesson I learned from being a former China RTO investor, and it's a very important lesson for any investor.
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