Michael Mauboussin and Dan Callahan of Morgan Stanley Counterpoint Global recently published a terrific study that looked at how often individual stocks suffered deep losses. To sum up their findings – even the best performing stocks had to overcome painful drawdowns along the way. Or as they put it:

“The best stocks and investors suffer through large drawdowns, which can be considered a cost of doing business over the long haul.”

A dumpster-diving strategy

That made me wonder: How would a strategy built around systematically buying-and-holding stocks after they’d gotten crushed have done? After all, it stands to reason that if you focus on stocks that get pummeled, you’re bound to pick up…