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Podcast: Excess Returns
Episode: Six Potential Metrics to Help Limit Value Traps
Description: Deep value investing is about buying companies that other investors don’t want. It is about investing in companies where the current situation doesn’t look great – actually in many cases it looks horrible. On average, investors tend to overestimate the problems in these types of businesses  and as a result, stocks of these companies get cheap. But for some of these cheap companies, the situation is actually worse than what the market has priced in. These types of stocks are typically referred to as value traps. Although value traps come with the territory in value investing, the ability to limit...