You’d have to be crazy to own these stocks

Way back in December of 2013, I wrote an article identifying stocks that I found absolutely insane. My list included ITT Educational Services (ESI) and Peabody Energy (BTU). Shares of ESI have since fallen from $33.23 to $6.27, and shares of BTU are down from $19.25 to $4.56. In both cases, the issues reeked of doom. Investors had just become too accustomed to hearing complaints and ignoring them, so they failed to notice when things really did take a turn for the worse.

Many readers contacted me to let me know that they didn't appreciate my having insinuated that they were insane, to which I replied that I had not insinuated that they were insane, but stated it flat out. It was way-interactive and, honestly a lot of fun. The point is that in the twenty years (to the week) since I first became a stockbroker, I have learned a lot about when and why to give a company the kiss of death. Doing this is actually more about psychology and linguistics than finance and analysis. There is often something about tone, cadence, etc., that gives the game away when a CEO knows he is living on borrowed time.

As for the companies on today's list, most have already borrowed about as much time as they can. As always, do your own research before making any move on the stock market. In this case, your research will almost surely lead you to move your money into an investment that is more sound, financially, and mentally. Just for the fun of it (and because I am truly impressed) I've also named what I believe to be the most insane stock on the whole market. 

Julian Close

Julian Close

Julian Close became a stockbroker in 1995. In his 20 years of market experience, he has seen all market conditions and written about every aspect of investing. Julian has also written extensively on corporate best practices and even written reports for the United Nations. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.

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