Chapter 8. The Worst is Behind You: The Contrarian Story
The Last Rational Investor
Jack was a loner with little faith in human nature. He was convinced that the rest of the world was irrational and becoming increasingly so, and he felt that herd behavior was the rule rather than the exception. As he read about a selloff on a blue chip company after an earnings report that fell short of expectations caused the stock to drop to $8 from its 52-week high of $45, he told himself that the stock could not go down much further. After all, the company had been around 50 years and had once been considered a market bellwether. He called his broker and bought 1000 shares at $8, convinced that it was only a matter of time before it bounced back. A few weeks ...
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