My AOl Politically Incorrect Opinion:
Not only is my opinion on AOL politically incorrect, it's not based on any stated facts. Given those assumptions, I probably don't deserve to state my opinion.
But here is what I believe: from the beginning I have thought that TYCO management, LHSP management, GLX (or gblx -- whatever Global Crossing was!), WMB management, ENE management were all crooks. This was based just on gut instinct and listening to management's explanation(s).
My gut feeling says avoid AOL like the black plague. I simply can't even consider investing in a company that I feel is run by somebody I don't trust. My gut feeling has kept me out of more problems than potential gains from wrong gut feelings.
I look for the old-fashioned value plays -- p/s, p/b, p/e, current assets - debt is a easy figure to calculate, dividend growth, insider buys, no management turnover, understandable busy model.
Buffett said that one doesn't have to have superior stock picks, only that losses are limited. Don't take the big loss. I consider TYC, ENE, WMB as taking the big loss.
Buffett quotes:
angelfire.com
"An investor needs to do very few things right as long as he or she avoids big mistakes."
"Turn-arounds" seldom turn.
Is management rational?
Is management candid with the shareholders?
It is more important to say "no" to an opportunity, than to say "yes". |
