So long as one's estimate of intrinsic value are correct then its not catching a falling knife. Catching a falling knife refers to the permanent loss of capital from a position.
In the short term the market is a voting machine as reflected through the daily movements in the share price. In the long term the market is a weighing machine as reflected through the long term movements in share price relative to the long term movement in the value of the underlying business.
And to hedge my risk of being wrong on my view of intrinsic value I have portfolio limits and try to run a diversified portfolio
RRL Price at posting:
$1.68 Sentiment: None Disclosure: Held
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