Amit Chokshi_

The Problem With Stock Picking in a Down Market (SAN)

Top-down approaches result in herd mentality in that top-downers generally focus on broad secular themes that everyone, including the market, is/has already priced into securities. In essence returns are largely just driven by the risk assumed. By the time one figures out what sector to get into, the initial "risk-free" gains have already been made.

Also, time frame needs to be considered. If you're going long in any emerging market, the higher volatility requires one to be willing to have a stronger stomach and higher level of patience. Big deal that SAN is down 20% from its high, it's a large bellweather stock on the Chilean exchange and like a TKC on the Turkish exchange, serves as a proxy for its country's market. If the fundamentals are strong, buy more. The focus on the initial buy-in or a 52 week high price is a behavior flaw. The real value of a money manager is from what he/she does when a stock is down that 20% in terms of adding more, getting out, or just being patient.