Current Stock Market Nonsense

“I am a better investor because I am a businessman, and I am a better businessman because I am an investor.” In addition to the charming chiasmus of this sentence, I greatly enjoy this Warren Buffett quote for the substance of the statement as well. It is a useful sentence to keep in mind when evaluating the investment merits of a stock that has fallen in price rapidly, especially after the investor community receives notice of an adverse development or when the earnings report is disappointing when compared against existing expectations. How do you tell the difference between one of those Mr. Market mispricings and a classic value trap?

I recently covered eBay as it witnessed one of the worst trading days in the corporation’s history, with the stock falling 12% down to $23. I found the drop attractive because the stock is making $2.10 per share and will likely … Read the rest of this article!