. . . our long-term strategy has remained consistent over the years: We try to take advantage of stock prices that have been driven unrealistically low (or high) by excessive fears (or hopes) generated by incomplete research, sensationalized media coverage or human nature. Put differently, we frequently buy investments that are temporarily and unrealistically out of favor. With eyes wide open (and lots of research), we buy stock in companies that are experiencing problems if we feel these problems are either temporary or exaggerated. Conversely, we sell companies that are experiencing solid operational growth if we feel such growth will prove to be temporary or that current stock prices are excessive, even if operational growth extends for a while. It may feel unsatisfying to buy companies with problems or to sell those reporting robust results, but the message of history is quite clear—this approach is more likely to work over the long term than buying the most popular companies and selling the unpopular ones. Why’s that? It’s primarily because human nature, reinforced by peer pressure, tends to assign overly low prices to out-of-favor companies and overly high prices to popular ones. This approach doesn’t work all the time, of course, and it may feel emotionally draining to buy unpopular companies only to watch their operations deteriorate further—or to sell popular companies only to watch their success grow beyond expectations. Indeed, the regret caused by a few instances of unsuccessful, unpopular actions typically drives the average investor to follow the crowd (and his gut), even though this typically leads to below-average results. In addition, that’s why some professional investors, including those who should know better, also feel pressured to follow popular sentiment.