Stick to Your Knitting
by Charles B. Carlson, CFA
Dow Theory Forecasts

Boring is not always bad. Just ask any utility investor over the last year. Indeed, the best utilities have been the boring utilities - you know, the utilities that didn't get into energy trading or other areas and just focused on their utility business.

The utility sector is not an exception. Indeed, it is hard to come up with many industry sectors where Wall Street hasn't been kind to the boring plays and harsh to those trying to shake things up. Why? Because Wall Street doesn't like uncertainty. Wall Street likes consistency and dependability. And boring - though unsexy - is dependable.

Not surprisingly, Wall Street usually is not a big fan of companies that change their stripes in hopes of grabbing the brass ring. Look at utilities. Look at any company that branched into the telecom sector. Look at mega-conglomerates (can you say T-Y-C-O?) that bought their way into other sectors.

Bottom line: As an investor, you probably can't go wrong choosing boring companies, those companies which have been doing what they do for years and years.

On Wall Street, boring is beautiful.

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