text_combined: motley fool foolmotleyfoolcom reading may mime version 10 compatible mail reader convert subscription plain text unsubscribe send email ottofoolcom visit httpwwwfoolcomcommunityfreemailfreemailloginasp groovyfoolishboundary2a6f4da4ee1f4abcb782 contenttype textplain charsetusascii contentdisposition inline motley fool online seminar sell foolish selling strategy seminar resources start page httpwwwfoolcommaspi690047 orientation httpwwwfoolcommaspi690048 downloads httpwwwfoolcommaspi690049 lesson resources httpwwwfoolcommaspi690050 discussion board intro httpwwwfoolcommaspi690051 discussion board faq httpwwwfoolcommaspi690052 httpwwwfoolcommaspi690053 choose team httpwwwfoolcommaspi690054 lesson 2 companies gone wrong instructors bill mann tmf otter matt richey tmf matt httpwwwfoolcommaspi690055 httpwwwfoolcommaspi690056 lesson 1 offered list red flags trigger instant sales things pretty easy spot keep current events surrounding companies hold notice didnt spend much meaning time discussing wall street analyst upgrades downgrades one reason dont care analysts think certainly dont put credence deeply compromised ratings systems sure read analyst research many analysts significantly access business management ever individual investors valuable insights want watch much better predictor company trouble analyst rating systems watch bond market later strong buy pfffffft lesson look specifically signs company slipping investors need remember one key point highly valued companies takes small slip lead large share price decline example company priced multiple 30 times earnings expected grow faster one priced 15 times result investors highmultiple company much likely traumatized business starts show slowing growth earnings sales cash flows whatever thus highly valued companies particular important vigilant monitoring slips even company thats growing nicely may sending clear sell signals lets look instances companies started go wrong goal learn recognize warning signs impending stock collapse happens warning sign 1 slowing sales growth 2000 nokia nyse nok could wrong one fastestgrowing stocks 90s largest best capitalized participant one hottest sectors market wireless telecommunications 2000 nokia posted revenue gains well excess 50 quarter april 2001 hit clunker 22 growth followed 5 growth next quarter investors highmultiple high pe company rough companies second quarter row dramatically slowing sales enough get barnburner like nokia one enough words wisdom keep companies one hottest sectors short leash hot sectors cool always remember railroads hot sector canals car companies radios ends ready youre expecting sales continue roaring fullsteam ahead dont time position finger sell trigger sales growth slows unexpectedly prepared give company one quarter bring performance unload second straight quarter slowing sales measured yearoveryear basis always compare quarterly growth yearoveryear basis comparison sequential quarterly growth worthless measure seasonal effects skew sequential growth warning sign 2 divergent sales profit growth april 2001 nokia shed 60 peak value signs surely evident advance right yes companies growing top lines sales generally growing bottom lines earnings similar clip even though nokias sales growing 2000 50plus per quarter end year net profit growth dropped suddenly around 70 40 profits recovered slightly fourth quarter collapse first two quarters 2001 economics changed quickly hypergrowth company stock reacted fast even deeply versed technology economics mobile phone industry could see signs something wrong warning sign 3 plummeting cash flows 1999 lucent nyse lu looked beautiful earnings perspective horrible cash flow perspective look two numbers operating cash flow free cash flow free cash flow low growing companies significant capital investment demands low operating cash flow inexcusable lucents experiences telling 1999 lucents fullyear earnings came gaudy 47 billion based upon 38 billion revenue company top world time largest telecommunications equipment company market cap 260 billion httpwwwfoolcommaspi690057 httpwwwfoolcommaspi690058 matt detailed january 2000 big troubles afoot lurking companys cash flow statement operating cash flow basis fiscal 1999 company lost 276 million thats far cry 47 billion reported net income top lucent 22 billion capital expenditures thus difference lucents earnings free cash flow operating cash flow minus capital expenditures amazing 73 billion good way httpwwwfoolcommaspi690059 investor picked scary dichotomy could saved losses excess 98 aside since 1999 lucent gone restate 1999 cash flow twice recent 10k 1999 operating cash flow reported loss 18 billion get youll see nearly exact thing enrons old financial statements cooked books werent generating much cash fact destroying warning sign 4 watch bonds remember said ignoring analysts well information quite conflicted almost impossible tell one individual best interests mind fortunately another group give type signals investors hold companys bonds bondholders buy piece companys debt generally paid interest obligation company watch current price bond tell current odds bondholders giving obligation paid recommend keeping log sheet write price bond download see drop bondholders growing pessimistic might even see time analysts shouting strong buy httpwwwfoolcommaspi690060 httpwwwfoolcommaspi690061 recommend yahoo bond center search company get list existing bonds find bond maturity five 10 years hence check price bond priced 100 par means bonds facevalue interest rate fairly compensates investor risk bonds priced 100 meaning interest yield lower face value considered low risk priced face value even way httpwwwlnksrvcommaspi690062 writing worldcom nasdaq wcome bonds priced 18 means bondholders assume theres little chance theyll paid tyco nyse tyc recent problems high levels debt 675 interest bonds 2011 maturity priced 83 thats discount face one alludes imminent default qwest nyse q sports price 85 725 2011 bonds even closer par tyco prices dont indicate healthy companies dont insinuate imminent default bankruptcy either warning sign 5 doesnt get better brief time 2000 cisco systems nasdaq csco largest company world market capitalization warning wrote may 2000 stock around 57 ciscos valuation nearly 400 billion implied investors expected companys earnings reach 34 billion 2010 yet company ever generated earnings higher 12 billion single year httpwwwfoolcommaspi690063 turned almost perfectly called top cisco shed nearly 300 billion market cap since article decided couldnt possibly get better achieved sale near high watermark cisco showed signs decline quarter ended jan 29 2000 cisco turned sales 43 billion compared 28 billion quarter year growth rate 53 following quarter 58 higher 62 higher 66 higher ciscos stock price rise could beat numbers imagine 385 billion company pe 156 assumptions future growth mindbending though time midst data revolution seemed plausible investors must correct side probabilities taking portion cisco investment table point wouldve smart choice remember ciscos business fine 2000 enterprising investor knows lot right situation work homework lesson ask thing lesson 1 pick company maybe even company looked last time continue studying company following track yearoveryear sales growth past four quarters three fiscal years growth accelerating staying weakening track yearoveryear net income growth past four quarters three fiscal years net income growing slower faster sales trend figures track companys operating cash flow past three fiscal years lower higher reported net income corresponding year look quarterly cash flow figures bounce around due timing payments annual cash flow data much indicative real cash flow trends company longterm debt go yahoo bond center check price companys bonds dont know whether company debt type company name bond center see debt shows httpwwwlnksrvcommaspi690064 finally examine companys market cap relative current net income past year whats pe ratio reason believe company every rosy scenario already priced stock current bear market much less likely years ago still question consider help weve put together foolish stock information form track research information stocks get clicking weve also outlined find information httpwwwfoolcommaspi690065 httpwwwfoolcommaspi690066 dust old calculator find companys financials get work quarterly financial data best found company 10qs annual data best found company 10ks able find information using financials either company website foolcom quotes data area httpwwwfoolcommaspi690067 feeling little lost youre new using sec filings read overview financial statements else best youve done report findings teammates weve also put together ongoing list resources dive little deeper click lesson resources link right column click find resources help better understand financial statements general investing equations stock options httpwwwfoolcommaspi690068 httpwwwfoolcommaspi690069 matt joining boards analyses examine processes httpwwwfoolcommaspi690070 fool bill matt lesson plan lesson 1 selling httpwwwfoolcommaspi690071 lesson 2 companies gone wrong httpwwwfoolcommaspi690072 lesson 3 gut checks safety valves lesson 4 company becomes overvalued lesson 5 report card part 1 business prospects lesson 6 report card part 2 valuation lesson 7 panning panera lesson 8 report action johnson johnson seminar contains opinions ideas motley fool provided understanding motley fool engaged rendering financial professional services motley fool specifically disclaims responsibility liability loss risk personal otherwise incurred consequence directly indirectly use application contents seminar copyright c 19952002 motley fool rights reserved legal information httpwwwfoolcommaspi554475 groovyfoolishboundary2a6f4da4ee1f4abcb782 contenttype texthtml contentdisposition inline motley fool online seminar sell foolish selling strategy lesson 2 companies gone wrong instructors bill mann tmf otter matt richey tmf matt lesson 1 offered list red flags trigger instant sales things pretty easy spot keep current events surrounding companies hold notice didnt spend much meaning time discussing wall street analyst upgrades downgrades one reason dont care analysts think certainly dont put credence deeply compromised ratings systems sure read analyst research many analysts significantly access business management ever individual investors valuable insights want watch much better predictor company trouble analyst rating systems watch bond market later strong buy pfffffft lesson look specifically signs company slipping investors need remember one key point highly valued companies takes small slip lead large share price decline example company priced multiple 30 times earnings expected grow faster one priced 15 times result investors highmultiple company much likely traumatized business starts show slowing growth earnings sales cash flows whatever thus highly valued companies particular important vigilant monitoring slips even company thats growing nicely may sending clear sell signals lets look instances companies started go wrong goal learn recognize warning signs impending stock collapse happens warning sign 1 slowing sales growth 2000 nokia nyse nok could wrong one fastestgrowing stocks 90s largest best capitalized participant one hottest sectors market wireless telecommunications 2000 nokia posted revenue gains well excess 50 quarter april 2001 hit clunker 22 growth followed 5 growth next quarter investors highmultiple high pe company rough companies second quarter row dramatically slowing sales enough get barnburner like nokia one enough words wisdom keep companies one hottest sectors short leash hot sectors cool always remember railroads hot sector canals car companies radios ends ready youre expecting sales continue roaring fullsteam ahead dont time position finger sell trigger sales growth slows unexpectedly prepared give company one quarter bring performance unload second straight quarter slowing sales measured yearoveryear basis always compare quarterly growth yearoveryear basis comparison sequential quarterly growth worthless measure seasonal effects skew sequential growth warning sign 2 divergent sales profit growth april 2001 nokia shed 60 peak value signs surely evident advance right yes companies growing top lines sales generally growing bottom lines earnings similar clip even though nokias sales growing 2000 50plus per quarter end year net profit growth dropped suddenly around 70 40 profits recovered slightly fourth quarter collapse first two quarters 2001 economics changed quickly hypergrowth company stock reacted fast even deeply versed technology economics mobile phone industry could see signs something wrong warning sign 3 plummeting cash flowsin 1999 lucent nyse lu looked beautiful earnings perspective horrible cash flow perspective look two numbers operating cash flow free cash flow free cash flow low growing companies significant capital investment demands low operating cash flow inexcusable lucents experiences telling 1999 lucents fullyear earnings came gaudy 47 billion based upon 38 billion revenue company top world time largest telecommunications equipment company market cap 260 billion matt detailed january 2000 big troubles afoot lurking companys cash flow statement operating cash flow basis fiscal 1999 company lost 276 million thats far cry 47 billion reported net income top lucent 22 billion capital expenditures thus difference lucents earnings free cash flow operating cash flow minus capital expenditures amazing 73 billion good way investor picked scary dichotomy could saved losses excess 98 aside since 1999 lucent gone restate 1999 cash flow twice recent 10k 1999 operating cash flow reported loss 18 billion get youll see nearly exact thing enrons old financial statements cooked books werent generating much cash fact destroying warning sign 4 watch bonds remember said ignoring analysts well information quite conflicted almost impossible tell one individual best interests mind fortunately another group give type signals investors hold companys bonds bondholders buy piece companys debt generally paid interest obligation company watch current price bond tell current odds bondholders giving obligation paid recommend keeping log sheet write price bond download see drop bondholders growing pessimistic might even see time analysts shouting strong buy recommend yahoo bond center search company get list existing bonds find bond maturity five 10 years hence check price bond priced 100 par means bonds facevalue interest rate fairly compensates investor risk bonds priced 100 meaning interest yield lower face value considered low risk priced face value even way writing worldcom nasdaq wcome bonds priced 18 means bondholders assume theres little chance theyll paid tyco nyse tyc recent problems high levels debt 675 interest bonds 2011 maturity priced 83 thats discount face one alludes imminent default qwest nyse q sports price 85 725 2011 bonds even closer par tyco prices dont indicate healthy companies dont insinuate imminent default bankruptcy either warning sign 5 doesnt get better brief time 2000 cisco systems nasdaq csco largest company world market capitalization warning wrote may 2000 stock around 57 ciscos valuation nearly 400 billion implied investors expected companys earnings reach 34 billion 2010 yet company ever generated earnings higher 12 billion single year turned almost perfectly called top cisco shed nearly 300 billion market cap since article decided couldnt possibly get better achieved sale near high watermark cisco showed signs decline quarter ended jan 29 2000 cisco turned sales 43 billion compared 28 billion quarter year growth rate 53 following quarter 58 higher 62 higher 66 higher ciscos stock price rise could beat numbers imagine 385 billion company pe 156 assumptions future growth mindbending though time midst data revolution seemed plausible investors must correct side probabilities taking portion cisco investment table point wouldve smart choice remember ciscos business fine 2000 enterprising investor knows lot right situation work homeworkfor lesson ask thing lesson 1 pick company maybe even company looked last time continue studying company following track yearoveryear sales growth past four quarters three fiscal years growth accelerating staying weakening track yearoveryear net income growth past four quarters three fiscal years net income growing slower faster sales trend figures track companys operating cash flow past three fiscal years lower higher reported net income corresponding year look quarterly cash flow figures bounce around due timing payments annual cash flow data much indicative real cash flow trends company longterm debt go yahoo bond center check price companys bonds dont know whether company debt type company name bond center see debt shows finally examine companys market cap relative current net income past year whats pe ratio reason believe company every rosy scenario already priced stock current bear market much less likely years ago still question consider help weve put together foolish stock information form track research information stocks get clicking weve also outlined find information dust old calculator find companys financials get work quarterly financial data best found company 10qs annual data best found company 10ks able find information using financials either company website foolcom quotes data area feeling little lostif youre new using sec filings read overview financial statements else best youve done report findings teammates weve also put together ongoing list resources dive little deeper click lesson resources link right column click find resources help better understand financial statements general investing equations stock options matt joining boards analyses examine processes fool bill matt case missed weeks earlier announcement please note correction lesson 1 fifth automatic sell rule regarding stock option grants read set 3 maximum developed companies 5 developing ones use 500 million sales rough boundary two read correct lesson entirety clicking lesson 1 questions hit team board ask away lesson 1 selling lesson 2 companies gone wrong lesson 3 gut checks safety valves lesson 4 company becomes overvalued lesson 5 report card part 1 business prospects lesson 6 report card part 2 valuation lesson 7 panning panera lesson 8 report action johnson johnson start page orientation downloads lesson resources discussion board intro discussion board faq choose team operating cash flow free cash flow lessons lucent log sheet yahoo bond center bigcap tech stocks mean big risk overview financial statements seminar contains opinions ideas motley fool provided understanding motley fool engaged rendering financial professional services motley fool specifically disclaims responsibility liability loss risk personal otherwise incurred consequence directly indirectly use application contents seminar legal information copyright 19952002 motley fool rights reserved groovyfoolishboundary2a6f4da4ee1f4abcb782 thu 25 jul 2002 141603 0400 sell online seminar lesson 2 companies gone wrong