A few months back, it looked very much as if the whole market was overpriced. Since then, both stock prices and corporate earnings have risen higher. That’s not ideal, by any means, but it is considerably better than the trend we were faced with earlier this year, when prices were going through the roof while earnings were barely budging. There are values out there, and to find them, it helps to know the market’s biases.
One strong bias is for the new, and it’s not hard to see why. There is nothing so exciting as a company’s explosive youth, when it grows geometrically and shows no signs of ever colliding with reality. But where there is excitement, there is hype, and where there is hype, there is overbuying. Today I’m going to look at great companies that have fallen from what they once were, but show real signs that they may rise again. For some of these companies, their heyday is decades past, for some, only weeks. It matters not, there is value here, and the for the moment at least, a clever buyer might catch the Street looking the other way.
Remember to treat these ideas as just that, ideas, and do your own research before making any investment decision.