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July 06, 2006

Comments

Douglas Knight

"The reason why these discounts persist is a large area of research in finance."

If you don't have an explanation, better yet predictions, it's a mistake to try to take advantage of it. What's the point of buying at a 15% discount if you have to sell at that same discount?

If the value of the stock were its dividends, a discount would be great, even if you eventually have to sell at the discount.

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