Page 66 - Trading #101 Course – Part One: Trading Basics

TRADING #101 COURSE – PART ONE: TRADING BASICS /2017-10-06

Value Investing in a Bear Market

Value investing is a popular technique made famous by Benjamin Graham and Warren
Buffett. Value investors, all look extremely smart during a bull market, which we have
experienced for 30 years from the 1970’s all the way until October 2007.

The reason value investors look smart during a bull market is because during this 30-
year period, for the most part, if you put money in the stock market and waited a few
years you were likely to make a comfortable profit.
Then the market cycle began to change, and companies that looked too big to fail
started to plummet. The buy-and-hold or value investing strategy didn’t work the way it
had for so long, hence the “past performance does not guarantee future results”
disclaimer slogan comes to mind.

The world has entered a new market where the value investing or buy-and-hold
strategies need to be reassessed.
In this new age, it is more important than ever to be educated and look at the big
picture. If you are a value investor, you must always have your eye on the ball to be
sure that the companies you have selected to invest in are performing the way you had
planned. Do not fall prey to the devastation of a bear market, watch your portfolio
carefully always.

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