Stocks to Avoid – Accounting Irregularity


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There are also warning signs that indicate a stock is something you should steer clear of – or, if you already have it in your portfolio, consider offloading it sharpish. Or maybe it shows a stock you could short.

For example, accounting irregularity.

A clear signal to bail is an accounting irregularity. Companies that can’t get their books straight are not to be trusted. You should not buy companies that can’t keep track of their assets. There are very few harmless reasons for accountancy irregularities and an infinite number of toxic ones. As such you should expect the worst if you hear a company discovering one. It is often a prelude to complete collapse.

Either way, a company that can’t control its bookkeeping is unlikely to be able to control its business model. As such, a company with accounting irregularities is probably doomed.

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