Many private investors concentrate on loss-making technology shares, hoping to find the next Microsoft(Nasdaq: MSFT). Snag is, for every Microsoft there are lots of jam-tomorrow shares that perform badly.
An alternative approach is to look for recovery shares. These are shares undergoing a severe corporate trauma, but which have the potential to survive and eventually prosper. Recovery stocks can make good investments because the market often over-reacts to bad news. When investors see that the worst is over, a share price can recover quickly….
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