One of the most difficult times a value investor can experience is when the market is bullish but confidence is low. Speculators pile into popular names, chasing the buck, and sell out of longer-term value plays. Those of us who see these depressed value names as opportunities suffer twice - first when our stocks drop in value because so many other holders are selling, and again when we watch overvalued investments trade even higher as the crowd struggles to buy in.
I've been taking it on the chin this past month and, even though I have a nice cushion from the early half of the year, it still hurts. It's not so easy to keep repeating my mantra of "in for the long term" when the short term pain intensifies. In particular, I like to time my trades such that I can be regularly rolling out of successful positions to reinvest in new opportunities. With nothing to roll out of, I have less incentive to research other trades. It's even worse, of course, when I watch trades I rejected because of specific timing issues or because I wanted to buy slightly lower. Naturally, they're all outperforming. The grass is always greener I suppose.
