Educate Yourself - No Sacred Cows

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No Sacred Cows
by Charles B. Carlson, CFA
Dow Theory Forecasts

One thing investors should have learned by now is that there are no sacred cows in this market.

Witness the latest selling in two former bellwethers - GE and IBM.

These blue-chip acronyms used to receive the benefit of the doubt from investors. In some ways, these were prototypical "faith" stocks - you know, stocks where you never were quite sure what was going on under the veil, but you felt that, well, these were GE and IBM, and things usually turned out alright.

In this post-Enron world in which we now live, however, companies aren't getting a free pass. If investors have questions and the companies have no answers, they sell. Period.

That bad things can happen to good companies is truly an important lesson to keep in mind next time you assume that one of your portfolio holdings is bulletproof.

In today's markets, there's no such thing.

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