Interactive thread on investment-related questions

[Southie]

Re: Interactive thread on investment-related questions

@kakaballi

That’s what I am asking. Why do you believe that a stock with > 10b mkt cap and rock solid balance sheet goes ‘out of favor’? I would say several analysts would be following a stock with > 10b mkt cap and price would already have adjusted to reflect their assessments. Unless, of course, you are looking for less than market return with lower risk.

One more point - lower risk does not necessarily mean lower return. By payinf fair to less than fair price, you reduce risk while potentially increasing return.

The SNP500 scares me since it is market cap weighted..apple is 4% of the index. The more expensive a stock gets more the index funds have to buy it. Thus driving price higher. So index funds buy more.

To counter the bias towards privy stocks I have structured individual stock portfolio with stocks that are undererighted. For example. Big Pharmacy were out of favor 3 to 4 yrs ago due to patent expirations. That was an entry point. Now they are fairly valued. Some old tech stocks like Intel appl matls look attract five since they are out of favor.