Investing in down trending and troubled stocks could mean a complete blow out. Those last puff cigar businesses are not only dangerous but outright risky. In his book Dhando Investor Mohnish Pabrai talks about fighting the Chakavu in the last chapters. Its a battle formation from which no soldier escapes alive. According to Nasdaq information site Mohinsh Pabrai was the owner of 4.66 million shares of Delta financial, a struggling mortgage related company. He perhaps bought it cheap, low multiples, hard to tell what he paid for. But assuming when he owned it prior to most recent filings of 9/30/2007 the stock was trading at around $ 4.82 or less. So estimating his investment of $ 23,000,000 was at risk. Here is the link to his portfolio: http://www.nasdaq.com/asp/Holdings.asp?symbol=DFC&selected=DFC&page=holdingssummary DFC filed for bankruptcy last week and the shares are trading at 0.19 cents. Its seems like they cannot sustain their on going operation any longer. Thats is it for them. What happened to the $23 million invested is anybody guess. May be they were able to nimble their way out at ridiculous prices as the stock started sliding who knows. May they did not do anything. Anyway you look at it you dont want to be investing in a company thats about to close its door and leave you worthless paper to hold. That is why those company's are cheap! You will not hear this in the media, nor those carefully written articles. But DFC was real cheap, low multiples, and very attractive to value investors back than. It was a much touted stock with amazing stories of recovery potential. All that hype and nonsense was being circle jerked around for quite some time. Had that $23 million were invested in buying lets say a sound company like AAPL at 153 on 9/30/2007 with 150,000 shares it would have yielded at today's prices roughly $194 -153= $41 x 150, 000 shares = 6,163,398 or nearly $ 6 millions in profits. Not counting all those juicy covered calls that would have been written on apple stock for another $1 million dollars with it. And that is not the end, AAPL stock has still ways to go from here and those gains would keep on adding to your account month after month and perhaps year after years.. But what happened to those $23 million dollars and Mohnish Pabrai and others is a wild guess. Certainly not good if your stock stops trading and grinds to a halt. My hats off to value investors! You certainly amaze me with your brilliant doggy puke.