Elections Today
- Pennsylvania
Recent Projections
| State | Candidate | Delegates |
|---|---|---|
 Donald Trump | ||
Pennsylvania |  Joe Biden |
Sirius XM Radio: You're a bit late to sell this one
— -- A: You wouldn't believe the amount of flak I've taken over the years for cautioning investors about investing in Sirius Satellite Radio and XM.
I urged investors as long ago as December 2004 to avoid the satellite radio companies.
The stocks had all the makings of stocks I avoid. They lost money. They were promising big things in the future, but not delivering. And individual investors fell completely in love with the stock, to the extent of writing lengthy diatribes to me defending their decisions.
Just a quick search of the archives showed three additional times I cautioned investors against these stocks, in 2005, 2006 and 2008. You can read them here:
The stocks have been a case study of what not to do in investing.
First, you shouldn't hold individual stocks as they go into freefall. Sirius, for instance, was trading for more than $60 a share in February 2000 as the animal spirits on Wall Street were raging. It's now trading for about 17 cents.
As I've said many times, if you're buying stocks in individual companies, you need to cut your loss at 10% or so of what you paid. If this stock returns to $60 a share in our lifetime, that would be remarkable.
Second, if you hear everyone buzzing with a great story about a company or a stock, watch out. It's these "story stocks" that investors get infamously excited about, and inevitably overpay for. If you pay too much for a stock, you've sentenced yourself to subpar returns.
As for the reverse stock split, that's not an answer for you. A reverse stock split is really just Wall Street hocus pocus that has no real effect. While a 30-for-1 reverse split would get the stock price back up, you would only have one share for every 30 you used to have.
You can read more about why a reverse stock split is bad news here.
Related Stories
ABC News Live