Some Stocks Are Best Kept at Arm’s Length

Some Stocks Are Best Kept at Arm’s Length

BY John Dorfman 

Like a politician’s promise, some stocks have an alluring story but little to back it up.

You are definitely walking into danger if you buy a stock that sells for 100 times revenue or more. These are concept stocks, the shares of companies that have done little or nothing yet but are expected to come up with a driverless car, a cure for a major disease, a blockbuster gold mine or some other fantastic breakthrough.

Most often, investors’ hopes are dashed.

Over the years (2000-2006 and 2012 to the present), I have compiled 11 lists of stocks selling for 100 times revenue or more....