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Buying at market bottoms and GE

June 26, 2008 1:35 am by Dean Morel

I often see this confusion in fundamental investors, how can you call a bottom? The thing is you can’t. Technical investors know that and never proclaim they can. Fusion investors also know they can’t time market bottoms, but they also know they can increase their chances of getting close to the bottom by combining fundamental and technical analysis in a mixing bowl along with some behavioral finance. Fusion analysts know they don’t have to nail the bottom, to outperform they simply buy at prices lower than 50% of other market participants.

Buying low has less to do with analytical skills than most value investors believe. Buying low is about emotions, psychology, strength of character and a combination of every piece of information that available on an asset.

With this in mind the FI Fund is buying General Electric (GE) at 28.42 Up 0.83(3.01%) 11:29am ET. The fund is buying 1000 shares or less than 3% of the fund. A write-up to follow.

Inspired by this seed on trying to catch bottoms. [TMF Falling Knives]

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