Time to be optimistic in equities

I often adhere to a strict investment philosophy based on fundamentals taught by Warren Buffett. I am not concerned with how a stock performs a day, a month, or even a year after I pick it. I am concerned only with the business itself. It's the same with buying a portion of a company (through shares). I don't check the stocks and see how they're doing. The market will eventually price it right. Reading financial statement has been an essential process in my investment process. Most people only read profit and loss statement. But in my view we have to read all the 3 statements in the financial report: Profit and Loss statement, Balance Sheet and Cashflow statement. I reckon the 3 statement to a 3 dimension formation.Why do I say that? If the company is earning good profit but not generating cashflow, something may not be wrong with the company. If the company is generating good cashflows but it is heavily in debt, this stock may deem to be too risky to invest.After I have singled out the stocks that look good from its "3 dimension formation", I will calculation its intrinsic value using my proprietary Discounting Cashflow Model (DCF). I will invest in stocks that are at least 40% undervalued compared to my DCF calculation.Some investors had commented that this kind of investment style is too outdated in today's dynamic investment environment. Maybe, but this method had certainly helped me avoid some pitfalls and achieved a good ranking in an American stock-pick competition.In 2007, I had participated in a 1 year stock-pick competition organized by Zacks.com in America. At the end of the competition, I was ranked 407th out of 27,700 participants, hence this makes me top 1.47% of the competition. In the competition I had achieved 32.67% return on my portfolio, for the same period S&P was only up 6.99%, and Dow Jones was only up 4.16%, hence I had outperformed the broad market by a wide margin.One of the signs of market bottoming that I had observed is when directors of beaten down stocks buying back its shares in huge quantity. My logic is that if the company's fundamental is good, while share price is already down 30% - 50%, the directors and management staff should see value in their own stocks and invest in them. I have not seen this sign yet.