Auric,
In April of 1997, William Green wrote the following article for Forbes Magazine regarding a small, pharmaceutical industry player known as Fuisz Technologies. The article was somewhat bullish (read for yourself). A few months later the author got caught up in his own words and made Fuisz the sole investment in his meager portfolio. If that weren't enough, his father-in-law also made a substantial investment, also based on the author's article. Needless to say, Fuisz has bombed (big time) since April of 1997.
forbes.com
I remember the article very well. It was one of the few small cap stocks I decided to follow. My decision to track Fuisz was based partly on the author's article, and partly on the large numbers of analysts that were also heavily touting Fuisz. However, I didn't invest. I only tracked the stock. There were too many red flags for someone like myself, who is highly suspicious of things that "sound too good to be true". This time, procrastination and nagging doubts paid off for me. <g>
Well, Mr. Green has written another article about Fuisz. This one appears in the September issue of Money Magazine. I highly recommend it as required reading for anyone who thinks that they're infallible. That was Mr. Green's biggest mistake (IMO). Broker but wiser, this article concentrates on the flaws in his thinking over the past two years regarding this one stock. I would link the article for everyone, but it hasn't yet hit the Money On-line archives, so you'll have to go purchase the magazine somewhere if you want to read it now. Although the article is a relatively short one, it is packed with the somber reality of someone who refused to admit to himself that he had made a huge error. If nothing else, I give this writer an "A" in honesty, albeit somewhat late to save himself some money.
As a caveat for others who blindly follow the advice of "professional" analysts or magazine writers, beware of what you invest in. Before you so casually plunk your money down on your brokers desk, know why the analysts are touting a given stock. Be aware of why and how a particular stock ended up being featured in a national financial magazine. Understand how this feature ended up on some assignment editor's desk. With Fuisz, the evidence and lack of substantial numbers was all there, up front and easy to read. The only thing they had was a promise for the future. Correctly interpreting what you were reading was the hard part...
KJC |
