Enronization

Even if you don't own any of their stock or any stock at all you will want to read this.

What Enron corporate officers did with their accounting firm is nothing new. It has been going on for years, but recently has become more egregious. Hiding facts from stockholders by showing Annual Reports with tiny footnotes has been happening for years. Even experienced accountants have trouble understanding what various financial statements mean. What chance does the little investor have? And that is the whole idea. The insiders don't want the outsiders to know what they are doing with the company money.

You have been told by your broker and by brokerage company advertising that you should do your research before you buy. You can research until you are blue in the face and still not know. For years I have been preaching that research is worthless.

You can go to nexus of all research companies ? Morningstar ? and still the report they give you will not tell you the whole true story. I have recently been told that Morningstar is about 6 months behind in the posting of their material. Maybe and maybe not, but it doesn't make any difference if the facts they are reporting are lies. This not to fault Morningstar as they are merely a conduit of information.

There should be a lot of good things happen as a result of the bankruptcy of Enron. The duplicity of Arthur Andersen is despicable. They were acting both as consultants and auditors. The consultants were telling the company what to do and how to get away with it and the auditors were rubber stamping their actions. It's like have the fox guard the hen house.

For some time the Securities and Exchange Commission (SEC) has been looking into recommendations by in-house analysts of brokerage firms who have made Initial Public Offerings. These analysts should keep their mouths shut. Can you imagine any analyst keeping his job if he should happen to tell the truth about a stock his company was pushing? Those beautiful full color reports from your broker belong in the wastebasket.

It is about time that the SEC cracks down on both these types of scams. And that is what they are. Anything to get the investor (you) to part with his money.

For the next year we are going to see more Enron-type accounting scandals. These will cause the investor to become very wary about what to buy so he won't buy anything. This will cause the stock market to be weak. Each time another one hits the fan there will be additional selling. The basic confidence of the investor has been shaken and it will be a long time before it returns.

I do sympathize with those who lost their money in Enron, but I do hope it will have the effect of activating some of the Washington beaurocrats to act to protect the millions who have not yet been victimized.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

al@mutualfundstrategy.com; 1-888-345-7870

---

Dont Ask Your Broker

Unfortunately, most of you who are reading my column are... Read More

Complacency

During the month of January the Dow Jones Industrial Average,... Read More

What is the Most Important Indicator of All?

Most stock market traders have a favorite technical indicator.The one... Read More

The Secret to More Winning Trades is as Simple as Avoiding This Common Mistake

If you're a normal human being, your need to feel... Read More

Dont Spend Another Dollar on Business Opportunities Until You Read This

With an insecure job market, overworked employees, insufficient retirement savings... Read More

365/7/24

What does it take to be a stock trader? It... Read More

Finding A Good Stock

One of the things people are always asking me is... Read More

Money, Insanity and Wall Street

Money: the most charged word in the planet. It means... Read More

The Inside Scoop on Mutual Fund Rip Offs

The bear market that showed up at the end of... Read More

Mutual Funds: The Modern Den of Thieves!

Mutual funds were created with the idea that one person... Read More

How Covered Calls Turned a Trader Around

Sidney felt sick as she looked at her latest OptionsXpress... Read More

The Cub; II

We keep hearing about this bear market and that the... Read More

What is Involved in Peak Performance Trading?

There is so much involved in developing peak performance, that... Read More

Emotional Trading

The single most expensive stock market trades are those made... Read More

Mutual Fund Ball and Chain

The broker told me not to sell because the mutual... Read More

Market Psychology

Today we are inundated with tons of information about the... Read More

Investing in Trash Company Stocks

Refuse is a serious issue in any society, about as... Read More

E-mini Day Trading - Day Trading for Beginners - Stock Market Timing Software

I mean it when I say that. While plastic silverware... Read More

Oil Stocks As A Long Term Investment

The demand for world oil is increasing while world reserves... Read More

What Are You Waiting For?

Do you own any mutual funds? In an IRA or... Read More

Trading vs Investing

I often hear from people, "I don't trade. I invest.... Read More

A Good Fund Manager

Every Wall Street analyst, financial planner and broker will tell... Read More

Hedge Funds

You read and hear a lot about hedge funds. Unfortunately,... Read More

Wall Street Paradigm

In 1960 an engineer working for a watch company in... Read More

Laws and Efficiencies and Theories of Diminishing Returns

The basis of diminishing return discussions surround such simple notions;... Read More

The Secret Art of Backtesting

If you have not back tested your trading system, you... Read More

Successful Trading ? Taking Profits - Part 2

Suppose your position has made a big move and you... Read More

Shadow Bull

As one of my regular readers you know I have... Read More

How Much Money Can I Make With Trading? What Account Size Do I Need To Start?

What account size do I need?How much money can I... Read More

The Stock Market is a Roller Coaster: Prepare for the Ups and Downs

IT'S REMINISCENT OF THE OLD children's tale about an old... Read More

Trading Tips No 6: The High Cost of Low Cost Stock Market Information

It has been said that low cost or even free... Read More

Stock Analysis

I receive emails from Morningstar. This company provides statistics and... Read More

Duck

Duck! No I don't mean a quack, quack. I meant... Read More