Three tempting recovery plays

Unless you’re good at contrarian investing recovery shares should not form the core of your investment strategy. Yet there are occasions when markets overreact to a piece of news and this provides a profitable opportunity.

Unless you're "adept" at contrarian investing, says Nigel Milton in Investors Chronicle, investing in recovery shares "should not form the mainstay" of your strategy. Yet there are occasions when markets overreact to a piece of news and this provides an opportunity.

To identify recovery shares, look for turnaround situations, for firms that have suffered a "genuine temporary setback" and "asset plays offering a margin of safety".

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Charlie Gibson

Charles has previously written for the MoneyWeek, giving readers his share tips regularly and covering other topics on the side such as stock markets and the economy. He has also written for The Business, Shares, Investors Chronicle and The Evening Standard, and Charles has presented on LBC and been a guest on BBC One and BBC World. Aside from his journalist background, Charles graduated as a chemist from the University of Oxford specialising in ligand gated ion channels.