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

[email protected]; 1-888-345-7870

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Will these mutual funds help me to create Rs 8 crore?  Economic TimesIf you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.
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Can mutual funds give multibagger returns like stocks?  Economic TimesStocks can be multibaggers. They can offer extraordinary returns in a very short period. Can mutual funds ever do that? This was a question thrown at Rajeev ...
A look at mistakes committed by investors of equity mutual fund schemes  Moneycontrol.comBalwant Jain. The interest of investors has been shifting from direct equity investing to equity mutual funds over a few years. Though this is a welcome trend, ...
Why your core equity portfolio should be in index mutual funds  Economic TimesInvestors flock to the performing fund “after” it has beaten the index. Fund selection is not an exact science, and there will be hits and misses.
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Which mutual funds will do well under new government?  Economic TimesIf you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.
Small and mid caps revival on cards; should mutual fund investors join the party?  Economic TimesMany stock market pundits believe that mid cap and small cap stocks are likely to bounce bank in the current rally in the market.
Heres why investors should make index funds a part of their core portfolio  Business StandardWe often hear statements such as “Localisation is the key to success in India” or “What works in the rest of the world does not work in India”. These statements ...
What to do if your mutual fund scheme earns more return than your investment  Economic TimesAre the returns shown in your mutual fund account statement same as the returns delivered by your fund? It is quite likely that you might have earned less than ...
What India's top three mutual funds bought and sold in February  LivemintMUMBAI: Inflows into Indian equity mutual funds in February were the smallest in more than two years as savers held back investments amid market volatility ...
Investment in equity MFs drops 35% to ₹1.11 lakh crore in FY19  LivemintNEW DELHI: Investors pumped in more than ₹1.11 lakh crore in equity-oriented mutual fund (MF) schemes in 2018-19, a decline of 35 per cent compared to ...
Here’s a better tool to judge mutual fund performance than simple 1-year, 3-year returns  Economic TimesOne invests in mutual funds to earn potentially higher returns than those in traditional investment products, and I'm sure everyone looks at the one-year, ...
Quantum Mutual Fund uses cash pile to buy stocks cheap  Economic TimesQuantum Long Term Equity Value Fund, where value investing is the pronounced fund allocation theme, has brought down the level of cash at its plan to the ...
Stocks vs Mutual Funds: Which is a Better Option to Invest?  EntrepreneurStocks and Mutual Funds have their own set of hiccups, which are better to know before making your investments.
India's top broker shifts focus to mid, small cap funds as prices decline  LivemintDomestic investors in mid-and small-cap stocks pumped ₹27 billion into the nation's equities last month.HDFC Securities has joined a growing chorus to invest ...

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