I think this is basically wrong, because opportunities are time-sensitive. If a company is undervalued now, it’s not obvious it will remain undervalued until the next cyclical downturn, and you pass up on the benefits of any market correction in the valuation of the undervalued company.
Disagree. The point is not to pick out undervalued stocks, but to ride the cycles.
If you want to ride the cycles, shouldn’t you just market-time the broad index of your choice? Picking “undervalued” companies to ride the cycles implies that you have two skills (which, I think, are mostly orthogonal) -- the stock-picking skill and the market-timing skill.
Disagree. The point is not to pick out undervalued stocks, but to ride the cycles.
If you want to ride the cycles, shouldn’t you just market-time the broad index of your choice? Picking “undervalued” companies to ride the cycles implies that you have two skills (which, I think, are mostly orthogonal) -- the stock-picking skill and the market-timing skill.
Fair enough, although I would generally say to pick the stock via fundamentals and industry-specific knowledge.