As value investors, we believe the market does not correctly price many of its issues. But what are the causes of this inefficiency, and can we profit by knowing some of these causes? De Bondt and Thaler argue that a human method of interpreting data called " representativeness " cause ... Read more

Blockbuster ( BBI ) shares lost nearly 30% of their value yesterday, as the company suggested that its ability to continue as a going concern remains in doubt. GameStop ( GME ) and Blockbuster do share some similarities, leaving investors to wonder if Blockbuster is not just a few yea ... ... Read more

Nu Horizons ( NUHC ) is a distributor of hi-tech electronic components. The stock dropped 25% in one day last week when a key supplier, Xilinx, cut Nu Horizons as a distributor in order to streamline Xilinx's distribution network. Xilinx's products accounted for over 30% of Nu Horizons' ... Read more

If a company has been able to grow its revenues over the last several quarters, it may be a sign of strong future growth. However, investors should be careful not to assume that future growth is a fait accompli , or that revenues will even stabilize at current high levels. While we've o ... Read more

We've seen how some companies don't take quite as big a hit as do others during recessions , based on the cyclicality of the respective businesses. But surprisingly, some companies actually see business conditions improve during recessions. As an example, consider Daily Journal Corp. ... ... Read more

Value investors believe that Mr. Market's mood swings offer them excellent opportunities to buy low and sell high. But how does an investor avoid becoming Mr. Market rather than taking advantage of him? Influence , by Robert Cialdini , helps us understand the fac ... Read the ... Read more

Value investors believe that Mr. Market's mood swings offer them excellent opportunities to buy low and sell high. But how does an investor avoid becoming Mr. Market rather than taking advantage of him? Influence , by Robert Cialdini , helps us understand the fac ... Read the ... Read more

Most investors in the market focus on earnings and earnings growth. As value investors, however, we spend a lot time valuing company assets , since earnings can be volatile whereas many types of assets (e.g. cash, trusted receivables, real-estate, re-usable inventory) can provide a ... ... Read more

When outside bidders are vying for control of a company, management and shareholders of the target will often hold out for a sufficient premium to the current price. After all, if shareholders can sell their shares right now for a certain amount, they should get more if they actually ... ... Read more