Breaking Down the Overstock Discount

This column was originally published on RealMoney on March 20 at 11:02 a.m. EST. It's being republished as a bonus for TheStreet.com readers.

It doesn't require a lot of effort to follow the crowd when investing in the stock market. You don't have to think independently. You don't have to ask a lot of questions. You don't have to carefully consider and evaluate data.

It's particularly easy to follow the crowd when negativity is involved. The easy path is to accept negativity at face value. The difficult path is to sort through the criticism and compare it to relevant data in an effort to distinguish fact from fiction.

As I said in my column on Overstock(OSTK Quote) last week, despite an "avalanche of negativity," this is a severely undervalued stock. The criticism directed at Overstock revolves around three issues: earnings, liquidity and management. ...