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A Serious Example Worth Closer Study
Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net
CANSLIM.net


Listen to this (click the play button below) minute and a half audio clip from July 11th 2008, which begins as we were discussing one of CANSLIM.net's upcoming webcasts.   


While pointing out that a lot was at stake for investors, we actually laughed about being on the sidelines in cash. With no stress, we talked about the joys of going to the beach and playing music with the band.  Then a viewer of the program inquired about Sirius XM Radio.  A clear explanation is given as to why (lack of earnings) it did not meet our investment criteria. "Two wrongs don't make a right!"  That is exactly what I said about the combination of Sirius and XM Satellite Radio companies when asked on 7-11-08 in this interview with Rick Waters on the Domain Show.  SIRI on that day closed at $2.13.  Today it is 11 cents! 

By using the "Search Articles" feature included at the bottom of each CANSLIM.net Mid-Day Breakouts Report (and elsewhere within the website) we found one prior mention of the ticker symbol SIRI.  That was the day the two pay satellite radio services providers announced the merger, which was greeted with great skepticism in the market commentary on February 20, 2007 (click here). 

Investors should always be skeptical of mergers/acquisitions that purport to bring up remarkable cost savings and efficiencies. Envision a sign that reads, "Please pardon our dust", and watch the combined outcome operate for a few quarters just to see how things shake out. Wait for the dust cloud to clear!  With all due respect to the complicated accounting work and maneuvering that is sure to occur, many institutional investors know it is better to stand clear. See the little blue triangles beside the September 2008 quarterly, and 2005 yearly earnings numbers below? A blue triangle beside the figure indicates pre-tax, non-recurring items were included (where possible, such items are normally removed to provide data better suited for comparison).   

Watch out for the potential pitfalls of investing in mergers involving flawed or failing businesses, and always remember the adage, "two wrongs don't make a right."  This is a very serious example for you to study!   When a sound financial firm merges with one that is unsound, investors' odds of success these days are not looking any better.  Wouldn't you rather own shares in a profitable company, when the market was also bullish? 

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About Kenneth J. Gruneisen, Founder and Contributing Writer, www.CANSLIM.net :
Kenneth J. Gruneisen has successfully completed the CAN SLIM® Certification Program.  Mr. Gruneisen became a Registered Representative in 1987 and his career includes experience offering personalized assistance to investors with more than a decade of experience as a Registered Principal managing a branch office.

The recommendations made by CAN SLIM® certified individuals are their own and may not be attributed to the CAN SLIM® Certification Program, William O'Neil & Co., Investor's Business Daily or their affiliates. The CAN SLIM® Certification indicates only that the individual has successfully completed the CAN SLIM® Certification Program. CAN SLIM®, William O'Neil & Co., Investor's Business Daily and any of their affiliates are in no way responsible for any loss or damage caused as a result of the services provided by these individuals.


Comments contained in the body of this report are technical opinions only and are not necessarily those of Gruneisen Growth Corp. The material herein has been obtained from sources believed to be reliable and accurate, however, its accuracy and completeness cannot be guaranteed. Our firm, employees, and customers may effect transactions, including transactions contrary to any recommendation herein, or have positions in the securities mentioned herein or options with respect thereto. Any recommendation contained in this report may not be suitable for all investors and it is not to be deemed an offer or solicitation on our part with respect to the purchase or sale of any securities.

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The recommendations made by CAN SLIM® Certified individuals are their own and may not be attributed to the CAN SLIM® Certification Program, William O'Neil + Co., Investor's Business Daily or their affiliates. The CAN SLIM® Certification indicates only that the individual has successfully completed the CAN SLIM® Certification Program. CAN SLIM®, William O'Neil + Co., Investor's Business Daily and any of their affiliates are in no way responsible for any loss or damage caused as a result of the services provided by these individuals.

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