We should stick to low-risk investments

[CityFarmer]

I think there is a general misunderstanding the definition of risk here.

While risk can mean several things, the focus on this was really on the fact that low volatility trumphs high volatility stocks because of the opportunity to reinvest in good rates and compound over long period of time.


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I will add-on with a quote of Warren Buffett from his famous postscript to The Intelligent Investor:

"“The Washington Post Company in 1973 was selling for $80m in the market…now, if the stock had declined even further to a price that made the valuation $40m its beta would have been greater. And to people who think beta measures risk, the cheaper price would have made it look riskier. This is truly Alice in Wonderland.”

To Buffett the volatility was an opportunity, not a risk.

so in these Washington-Post-type situations, would you buy because it is cheap or must have a catalyst (to prevent value trap situation)?

If the definition of the catalyst is market timing. Base on basic principle of value investing, we shouldn't time the market, because it's not predictable.

If the definition of the catalyst is realization of its IV, because the current price is below its IV i.e. "cheap", thus we should buy.