The Challenge of Buying Abysmal Stocks

When markets are rising, no one wants to look at the under performers. It's a painful feeling to watch stocks you own decline in price when other 90% of the market is climbing higher. Such a situation creates a feeling of incompetence -- investors start questioning themselves on their ability to invest accordingly.

To be sure, if you are investing in low quality companies, then it doesn't matter if the market is climbing or rising. The issue is with the business itself and that is a different matter. But, to the extent that a company is low quality because of temporary conditions, perhaps it is a diamond in the rough. In looking at beaten down businesses, I am reminded of Warren Buffett's observation that the problem with turnarounds is that they "seldom turn."...314 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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