Searching for Profits in Scandal Stocks – Bloomberg 09-14-12

Salient to Investors:

Stephen Dodson at the Bretton Fund said one of the best ways to make money is to be able to look past a bad headline -ask if there is something fundamental that permanently impairs the future earnings ability or is it just a short-term hit. More serous is accounting irregularities.

James Potkul at the Bread & Butter Fund looks past accounting issues if they are temporary hiccups or honest mistakes, especially if the company has a reasonably strong balance sheet.

Investors leery of the headline risk can instead buy the company’s bonds or preferred stock.

Value funds tend to be more volatile and are not suitable for short-term investors.

Read the full article at http://www.bloomberg.com/news/2012-09-13/searching-for-profits-in-scandal-stocks.html