How To Avoid False Profits

Recently, I've seen significant underperformance from "quality" stocks in non-U.S. developed markets. This is not surprising. New entrants who come into markets after a rally are nearly always afraid they have "missed it," so rather than focusing on future long-term gains, they often respond by trying to find "bargains" that can yield a short-term payoff. Usually, this may involve buying companies that are highly levered into good macroeconomic news and that will pop more than will steady earner...