Are you a brave or patient investor? Patient investors take advantage of behavioural mistakes by other market participants, who buy the expensive and glamorous stock of the moment. In contrast, the brave, who buy distressed companies, are getting paid with the kind of premium that the efficient market hypothesis predicts: take on risk, suffer volatility and get paid accordingly - Reuters Photo.
REUTERS: There are two main ways to get paid as a value investor: one is by avoiding the mistakes of your peers, the other is by making some mistakes of your own.
Avoiding other people's mistakes is all about buying stocks which are cheap but solid and letting the dividends pile up and compound. Buy quality companies which are cheap and you, by definition, miss out on Pets.com, or, dare I say it, Facebook.
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