Bet on the Horse and the Jockey

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One has to wonder if valuations really matter anymore. Mr. Market doesn't seem to care about whether a stock is trading at a P/E of 10, 7 or 4. If earnings continue to drop off a cliff, a price to earnings ratio doesn't do investors any good at all.

Yet fundamentals do ultimately matter. A company that can navigate through this environment with a lean operating structure and a strong balance sheet has a very good shot of surviving the storm. And as businesses shut down due to the difficult economy, those that endure could find themselves among a handful of participants in a particular industry. ...