Can a Graham Net Net be a value trap eg Eksons

[weijian]

Improved performance can also be considered a catalyst. That said, if everyone knows that the setback is temporary and the rebound is bound to happen, then it's also usually priced in.

Personally I like to buy companies in long-term secular growth, where future growth is not fully priced in.

Whether is it "setback is temporary/rebound is bound to happen" OR "companies in long term secular growth", both are the same at the hip isn't it? Both are expecting that Mr Market underprices what WE believe will happen. Often times, market underprice/overprice setbacks. Often times, market underprice/overprice growth. No surprises.

In general, recovery from setbacks is the exception and one manages the risk via buying at discount to intrinsic value (the popular word in value investing). In general, growing to the sky is the exception and one discounts back their future scenario and ensures they pay for "growth at a reasonable price" (the popular word in growth investing)

Both ways follow the same principles, just that one needs different method and temperament for each.