There are many different reasons to go long a stock. For some, a stock is a buy and hold forever. For others, a purchase is more of a "mean reversion" opportunity, when the markets has gone too far with its pessimism. We fell into the latter category when we recommended going long Altria Group, Inc. (MO), with a yield of almost 8%.

In our minds the bear case had strong merits. In fact so strong, that we ourselves had made them at higher prices (see here). But as is common with markets, stocks rarely stop at fair values and the pendulum does not hesitate to swing far in the other direction. We hence took a position with the understanding that we would sell if it reached fair value. When we last covered this stock we were more in the neutral camp and we recommended that investors not chase this stock.

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