These were stocks with Morningstar ratings of 5 stars and trading at less than half of their fair value estimate.
The stocks named were USG, UNH, COP, NWS, EXPE.
Let's see how they have done.
10/8/08 3/6/08 loss%The Vanguard 500 (I chose this instead of the S&P 500 because Yahoo has an adjusted close which accounts for dividends) has gone from 89.96 to 63.96 or a loss of 29%. So four out of the five stocks have underperformed the index.
USG 19.85 4.29 78%
UNH 19.20 17.90 7%
COP 60.77 35.36 42%
NWS 10.06 6.00 40%
EXPE 12.96 6.47 50%
Which tells me just because it's good and cheap doesn't mean it won't go down a lot. (Now let's see how they do on the upside -- if we ever get an upside one of these days.)
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Yet Morningstar maintains that (Graham-style) value investing protects the downside. (Does that mean Morningstar doesn't practice value investing?)