When you're an investor, the best decisions are those that you make using your head alone, taking into account nothing but cold hard facts.
However, actually achieving this higher level of thinking is difficult to reach and maintain when investors are confronted with their many behavioural biases.
So, bizarre as it may sound, these biases can stop us buying a share that we really should, as well as stopping us from selling a share that we really should. Importantly, and pertinent to this particular article, our biases can also stop us from taking a fresh look at a business or sector currently out of favour with investors but in the process of turning itself around.
Taking a fresh look
So when I sold my own shares in Tesco(LSE: TSCO) not too long after Neil Woodford sold his fund's stake in the business and watched events unfold from the sidelines, it was painful to watch. I saw some of my investing friends subject to a significant capital loss, and also saw those who relied on the income having to search elsewhere for a satisfactory level of income from shares.
Indeed, anyone who has read my articles on Tesco over the last 14 months or so will be aware that in the main I've been quite bearish on the stock as it faces significant headwinds both at home and abroad.
However, it can often pay investors to keep their eyes open for opportunities in the market as they arise, and to be fair I felt that the final results looked potentially interesting.
Firstly, the UK saw LFL sales growth of 0.9% in Q4 with group LFL sales up by 1.6% over the same period. There was a £6.2bn reduction in total indebtedness. As I've written before, debt can strangle a company.
Management also pointed to progress in the strategy of serving shoppers a little better every day. With UK customer satisfaction up by 5% over the course of the year, this seems to be bringing customers back into the stores as UK volumes rose by 3.3% in Q4 and international volumes were up 5.5% over the same period.
Should investors take the Tesco challenge?
As the chart below shows, there have been plenty of better places to put your hard-earned cash over the last 12 months. Indeed, Tesco shares have been the 12th worst performer in the FTSE 100 over the same period.
And for the last few months, I personally have been doing the Aldi challenge having been persuaded by my brother and some close friends. I have to say that I've saved a fair amount of money. So why the second look at Tesco?
Well, I noticed a little snippet within the results presentation that has made me think twice. You see, the average basket of products at Tesco used to cost £103.11 versus £89.06 at the so-called discounters. However, management says that the same shop now costs £86.35 at Tesco.
Now, the savvy shoppers that initially stopped shopping with Tesco simply on price may well spot that Tesco is again cheaper for the weekly shop and return to the stores.Of course we won't know whether there's a recovery based on one quarter - but in my view it's well worth watching going forward.
Will you grow richer in 2016?
Despite this return to growth the shares still sold-off, and although it's true that some traders will make their fortune by getting the call (either long or short) correct, some could find that they've lost their shirts.
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Dave Sullivan has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.