Value Investing: Identifying Market Overreactions
Value investing is a strategy that focuses on buying stocks that are undervalued by the market. While most investors tend to follow the crowd and chase after high-flying stocks, value investors take a contrarian approach. They believe that the market often overreacts to short-term news or events, creating opportunities to profit from mispriced stocks. Market overreactions occur when investors react excessively to news or events, causing stock prices to deviate from their intrinsic value....