Beaten-Down Bargains Will Rebound By Arne Alsin About this article: This core principle of investing can make you a lot of money, and, perhaps more importantly, it can save you a lot of money: The market always overshoots. The obvious example on the upside occurred in the late '90s, when the market recognized the transformative power of the World Wide Web. Tech stocks deserved to be marked up, but an enthusiasm-crazed market overshot by a country mile, taking the Nasdaq to over 5000. Given the seriousness of the credit crisis last year, the market was right in taking stock prices lower. When a full-blown liquidity panic was added to the mix, though, the resulting carnage was nothing short of breathtaking, particularly among smaller, less liquid stocks. Smaller stocks that should have been discounted by 20% or 30% were blasted to smithereens, crushed by 80% and 90%. Embedded therein is the strategy that has outperformed all others... Or, call us at 1-866-321-TSCM (8726) Monday-Friday, 8 a.m.-6 p.m. ET. Outside the U.S. and in Canada, call 1-212-321-5200.

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