CNNFN writes article about Superstar investors have forgotten investing 101:
by Heather Long @byHeatherLong March 26, 2016: 9:56 AM ET
valeant stock fall
Never wager excessively on one stock. That’s investing 101.
It’s too risky. If that stock tanks, you lose big time. A great example
of just how wrong it can go is playing out right now on Wall Street.
Several of Wall Street’s star investors (sometimes called “masters of
the universe”) bet a lot of money — billions of dollars — on a
Canadian drug company called Valeant.
Unfortunately for them, Valeant (VRX)stock plummeted from over $260
a share in early August to $31 now, a nearly 90% drop.
The company just admitted “improper conduct,” fired its CEO and
warned that it might default in April.
On top of that, Valeant is under investigation by the U.S. Congress,
the Securities and Exchange Commission and a few state attorneys
general. The company’s strategy to buy older drugs and raise the prices
isn’t sitting well with regulators.
The stock’s stunning fall is tarnishing the reputations of hedge fund
kings Bill Ackman of Pershing Square and John Paulson of Paulson & Co.,
and mutual fund manager Robert Goldfarb, among others.
After a stellar 45-year career, Goldfarb is suddenly retiring because
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