Lessons From Investor Mishaps

The market has recently treated investors to two case studies in investor mishaps. I will quickly note that the two cases I'm about to discuss are far from over, and so in the end, they may ultimately prove successful. But even if they do, it likely won't be because of some shrewd foresight but because of the nature of today's optimistic stock market. Al vso, both of these investments have languished for years while the market has been bountiful, making the opportunity cost that much higher. 

The first case is J.C. Penney (JCP), which has been at the center of attention recently as its largest shareholder, activist Bill Ackman, has thus far been unable to make lemonade from lemons. First, it was the botched attempt by former J.C. Penney CEO Ron Johnson to transform the company into something it is not: a higher-end retailer. The idea is intriguing, and there are signs that it's working (my first signal: my 29-year-old wife's willingness to go there and browse), but the execution was terrible. In one swoop, Johnson alienated the loyal customers at J.C. Penney instead of slowly feeding them the new concept. Sales fell off a cliff, and losses mounted....241 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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