My Dumbest Investment

My granddaughter was born in July 2001. We bought her every imaginable thing that featured Winnie the Pooh and other Disney characters. I was sending so much money to Disney and figured all the other new baby boomer grandparents were doing the same thing. So without doing any other analysis, I dumped the biggest dog in my portfolio, Enron, and bought Disney. (This was about halfway down Enron's slide to the bottom.) It was entirely a gut thing, as I certainly didn't foresee what was about to happen to Enron. It was dumb because I did absolutely zero research - but I ended up looking like the wizard of Wall Street, entirely by accident. I learned to sell my dogs, do my due diligence and to trust my gut.

- L.B., Texas

The Fool Responds: Some good companies suffer temporary slumps and are worth holding, but only if you understand them well. Few people understood Enron, yet many held it. Research can help you zero in on the most promising companies, boosting your results.

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