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Capitally Challenged Stocks That Could Be Diluted or Extinguished

I couldn't have said it better myself. I too hold these three issues, and I can't believe the utter mismanagement I've seen by them.

DOW and MRK I've held for a long time, but I added PFE because of its sterling balance sheet only to see them blow it up not a month later. Liveris should be out of a job after the ROH deal. Him and Immelt should go find a banana republic somewhere to mismanage.

On Mar 14 10:11 PM prudentinvestor wrote:

> This is an excellent article and a prudent view of current valuation
> metrics:
> (a) Balance Sheets Rule the Day.
> (b) Cash is King
> (c) Debt is Death.
>
> Unfortunately, many of our largest companies are managed by overpaid
> incompetents supervised by ignorant and irresponsible boards, who
> have failed to think through the sobering reality your article brings
> to light. Thus, they continue to embark on debt-fueled, cash-wasting
> mergers, ignoring the obvious lessons of a de-leveraging world. Dow
> Chemical was first, and has thus managed to morph, miraculously,
> from a US corporate powerhouse into a zombie on life support. Pfizer,
> then Merck followed close on Dow's heels, in an astonishing display
> of foolishness.
>
> The lesson I learnt in the past few months, is that one has to apply
> a "mismanagement discount" to stocks, since the probability of arrogant
> managers demolishing the value of perfectly excellent companies has
> to be added to the other uncertainties of this complex market climate.
>
>
> (disclosure: unhappy owner of shares in Dow, Pfizer, and Merck)