Value investing is an area that offers a great opportunity for those who practice it carefully. The market in nature overreacts to the sudden news and events that take place. However, these stock price movements are no long-lived. Thus, this is the times when the intelligent value investor should be increasing his or her shares in the firms considering that many people will be selling their stocks. This is the essence of the contrarian approach and is important when the shares are undervalued. It stems mainly from the human behaviors such as the herding instinct. Therefore, in problems, an investor should not reduce their shares in the market but increase them or ignore the market at all.
