Has it become harder to be a contrarian investor? As investors look back on a decade and more of underperformance by a generic 'value' approach, one popular narrative is that technological disruption has led to a proliferation of 'value traps', which have upended the returns from a strategy of buying seemingly cheap stocks. Value investors are particularly prone to getting their fingers burned when hunting for contrarian, deep-value situations, which is the focus of this week’s screen. These are the type of investments that offer superb potential upside by virtue of looking so much like value traps that other investors have been scared away. But unfortunately that means falling into value traps is an occupational hazard for real contrarians.
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