Beware of the ‘Financially Fragile’. Also, Update on the Legal Drug Cartel

DALL-E via Bing

Some stocks simply are riskier and junkier than others. It’s as simple as that...

Yet as I mused in my recent On the Street, “Playing Investors as Fools,”

For most investors, it’s the same old “fear of missing out” (“FOMO”) trap… that if they don’t get in they’ll miss out on the next big home run – which for some reason always happens to involve a company on the verge of going out of business. (When there are thousands of other stocks they can choose from, that makes perfect sense, right?)

Some of these companies are easy to spot, like those that have little in the way of sales or earnings... and are really little more than public Petrie dishes in search of a business.

Others are a bit harder, but if you look closely, they share one thing you might want to go out of your way to avoid...

They have so much debt, and their businesses are doing so poorly, that they can’t cover interest expenses out of their operating profits... or as my friends at Kailash Concepts (“KCR”) put it…