Investing in Stock: Common Sense Analysis Part 3
Don't buy anything you don't understand
What does this mean in plain English?
"Nortel's portfolio of telephony and converged IP telephony solutions deliver seamless, scalable real-time business communications with unprecedented flexibility in telephony applications deployment to meet our customer's environment, expectations, timetable and budget."
I don't want to pick on Nortel (or its copywriter) but I don't understand what this means. I suspect 95% of investors don't either. Nortel isn't alone (again not picking on Nortel). I don't understand what 90% of technology companies do. Or how most hedge funds work.
Enron was, towards the end, not an energy company but engaged in (illegally it turned out) in securitizations and other sophisticated financial transactions (someone had to explain a securitization to me).
I am a real subscriber in the KISS principle. If the company cannot explain what it does in a couple of sentences, I do not invest in it. Maybe I am a simpleton but investing in simple to explain businesses makes me comfortable (see rule #2).
What does this mean in plain English?
"Nortel's portfolio of telephony and converged IP telephony solutions deliver seamless, scalable real-time business communications with unprecedented flexibility in telephony applications deployment to meet our customer's environment, expectations, timetable and budget."
I don't want to pick on Nortel (or its copywriter) but I don't understand what this means. I suspect 95% of investors don't either. Nortel isn't alone (again not picking on Nortel). I don't understand what 90% of technology companies do. Or how most hedge funds work.
Enron was, towards the end, not an energy company but engaged in (illegally it turned out) in securitizations and other sophisticated financial transactions (someone had to explain a securitization to me).
I am a real subscriber in the KISS principle. If the company cannot explain what it does in a couple of sentences, I do not invest in it. Maybe I am a simpleton but investing in simple to explain businesses makes me comfortable (see rule #2).
Labels: Investment strategy
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