I have been asked several times in the last six to nine months about investing in some down and out company (Citigroup, GM, Nortel) on the thinking of  “what’s the worst thing that happens? I lose a few pennies/dollars a share. If the company turns around, I can double or triple my investment!” What scares me is that half the people who ask me this question are deadly serious. I tend to think of this type of stock investing as being in the hail mary school of thinking- named after the hail mary pass in football where you heave the football into the end-zone in some low percentage, high reward play made in desperation. It is, in many respect, the flip side of penny stock investing. Put your money in a business who’s salad days are in the rear view mirror in the hopes that there is still enough goodwill in the market to effect a turnaround with smart management. Think of Apple. Nissan. Puma. But is this an effective[More...]

Earlier Tuesday, the Treasury Department gave approval for a 10 of the 19 largest financial institutions to be able to repay the Troubled-Asset Relief Program (TARP) funds received over the past 11 months as a result of the financial crisis. Of the 10 institutions that received permission to repay TARP fund, eight ...

In January I predicted (see Notable Bankruptcies of 2008) that “major” bankruptcies in 2009 would challenge the 383 mark set in 2001 (the high-water mark after the dotcom bubble). I even suggested that it was possible that we could exceed 400 “major” bankruptcies in 2009. According to Bankruptcydata.com, there have been 90 “major” filings thus far in 2009. Assuming that bankruptcies are equally distributed throughout the year, this puts us on pace for 360 bankruptcies. I fully expect the filing pace to quicken as the year goes on, and as the economy continues to deteriorate. Below you can find an updated list of what I see as the “noteworthy” bankruptcies of 2009, as reported by <a[More...]

Today, Bank of America (BAC) announced it could need another dose of government capital to shore up its Merrill Lynch acquisition. Additionally, JPMorgan (JPM) just announced it would write down profits by 76% on asset writedowns. Nortel Networks (NT) just threw in the towel as well. But these developments come as no surprise ...