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Down but not out

Daniel Liberto tests a range of shares currently in the dog house to see how to spot companies with the potential to bounce back
Down but not out

“Buy low, sell high” is often touted as the golden rule of intelligent investing. According to this popular adage, championed by many of the world’s most successful investors, the only way to make any serious money from stock markets is to do the exact opposite of what everyone else is doing. That means investing in companies that have fallen out of favour – and steering clear of the high-flying, widely talked-about stocks that everyone else is purchasing.

This theory is hard to argue with. Anyone hoping to make a handsome profit from reselling goods will look to buy when demand is low and the assets are cheap, with a view to selling them on when they’re back in fashion and commanding a much higher price tag. Apply this same logic to investing and you can’t go wrong, right? If only it were so simple.

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