Contrarian investing
Buying what the market has given up on and staying careful where agreement is unanimous: a bet that sentiment has run further than the facts.
How to read the number
What separates it from simply buying whatever has fallen is a testable reason: it must be visible what the market has failed to account for, not merely that the price is lower than before.
When the metric lies
Crowds are often right, and cheapness is frequently a correct assessment of a deteriorating business. Without a size limit and a deadline for testing the thesis, the approach turns into holding a loss on principle.
Also known as: going against consensus