Blair

Book Review: 'The Aggressive Conservative Investor' by Martin Whitman

In a 'normal' market, value investing makes sense.

In a bear market, such as we have right now, it is impossible to know when you have 'good value.'

For example, consider Citigroup (C).

Except for the 2002 bear market when C traded down to $25, C traded in the $45-50 range.

So, from a value point of view, one would think that when C again traded at $25, it would be a good value buy.

Well, before last week's rally, C traded down to $15. In other words, a 40% hit. Even with the rally, C is still down 20%.

The point to be made is that value investing has its place in a 'reasonable' market environment. When you are in a bear market, you want to do technical market investing.

By the way, some months ago I recall reading in the Wall Street Journal that the brokerage firms were laying off technicians because they were not needed -- they were just overhead.