Seeking out companies that are unloved or ignored by mainstream investors is the key to discovering pricing inefficiencies and outperforming markets. These stocks are not priced inefficiently because of inferior quality; they are typically beset by problems specific to the company that are unlikely to endure over the long term.
The broad theme playing on people’s minds is uncertainty over the future growth of the world economy and hence the likely direction of future profits. This has resulted in heightened volatility and is another reason why solid companies may be available at attractive prices.
Profiting from private equity
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