Eric asks:
With respect to SKX, with all of the upside that you see, it probably won’t occur until the market as a whole starts seeing this opportunity. Why not wait until the chart improves and we see a little momentum before increasing the position?
This is a very good question, and one that I often ask myself of my clients when they are looking at falling stocks to buy. After all, if I really think that this stock is going to 26 or so, we could wait until 15 and it would still be fantastic.
9 out of 10 times, I accept your logic and preach it myself. In this case, and I could certainly be wrong, a few factors have contributed to my exercise in knife-catching. First, the stock is very oversold. Second, it is extremely cheap to a conservative estimate of asset value. Third, were it not for the maniacal focus on inventory, the stock would be flying (look at other retailers). Fourth, the stock does appear to have bottomed. Finally, in my mind, paring another loser to buy this loser (in part), keeps us exposed to various strategies (growth, value, small, large etc.).
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