The human tendency is follow the herd, not go against it. Selling what’s “up” is by definition going against the herd, and so is buying what’s ”down.” But investors who merely steel themselves to sell what’s gone up and buy what’s gone down may be missing the point. Brandes believes that the only way to understand if a stock is cheap or expensive is to assess its underlying intrinsic value and compare that value to the stock price. In our opinion, the difficult task of going against the herd can only succeed if it is supported by analysis that enables a comparison of value to current stock price. Noticing that a stock’s price has fallen is easy. Figuring out whether it is cheap is hard! 

Source: “Bill Miller: What’s luck got to do with it?” CNN Money, July 18, 2007