Looking at the Market from a Rational Perspective [View article]
" Here are some examples. Deere & Co (DE) fell from about $94 down to $25 at the March low and has rallied 88% up to $47 ...."
I had never owned DE before, but recently purchased a position in the high 20's after a little research, intending to hold it for the long term. My thoughts were intrinsic value in the mid 30's. After holding it for a few weeks, I sold most of my position in the mid 40's for an attractive return in excess of 60%.
This illustrates the enormous divergence of sense of value between different market participants. Some thought it was worth $90+ just a couple of years ago. I was glad to sell it in the mid-40's for a tidy profit, to someone who obviously thought it was a bargain. I don't think that anyone involved is smart or stupid, it's just that different market participants can look at the same thing and come up with very different conclusions regarding value.
Looking at the Market from a Rational Perspective [View article]
I had never owned DE before, but recently purchased a position in the high 20's after a little research, intending to hold it for the long term. My thoughts were intrinsic value in the mid 30's. After holding it for a few weeks, I sold most of my position in the mid 40's for an attractive return in excess of 60%.
This illustrates the enormous divergence of sense of value between different market participants. Some thought it was worth $90+ just a couple of years ago. I was glad to sell it in the mid-40's for a tidy profit, to someone who obviously thought it was a bargain. I don't think that anyone involved is smart or stupid, it's just that different market participants can look at the same thing and come up with very different conclusions regarding value.