thinking about my trading tactics

Satyajit Das says that markets overreact short term and underreact long term. This has happened with homebuilders which plunged when housing sales fell flat and then recovered most of their losses. Since then, homebuilders have gone downhill continuously. Countrywide is another recent example. Countrywide fell 25% in the subprime lender panic at the end of February before recovering 80% of that loss. Now it trades under 50% of the high.

I will try to make this rule my primary trading tactic.

I believe that the reason that this rule stands is because the markets first anticipate changes in the fundamentals and get ahead of them, later they fall behind and lag the fundamentals.