Is There a Sucker In You?: Wall Street's Rules, Part 3
Don't Talk to Strangers
Wall Street reminds me sometimes of that sleazy guy in the old Volkswagen van driving around neighborhoods looking to handout lollipops. As adults you would think we'd know what his intentions are. However, those who are always quick to approach the van with eyes gleaming carrying high expectations often have no clue.While careful due diligence will remind me not to talk to strangers, not everyone appreciates a bearish sentiment. The term these days is "basher." Look up the word and you will likely see my name next to it.
Be that as it may, I speak with these types of investors on a daily basis and it is often sad to hear the stories they share once they were finally allowed to exit the van. As you try to convince them that the lollipop wasn't worth it, they are off looking for the next van.Which reminds me of one of the things making Wall Street appear scarier than it really is -- Facebook's(FB) initial public offering gaffe.
Another example is Research in Motion(RIMM) , where although it has lost 95% of its value over the past three years (-51% this year alone), its management continues to insist there is nothing wrong with the company.But in RIM's case, this leads me to one of the most important rules of investing: Don't' try to catch a falling knife because you just end up getting hurt.