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My father was a defense analyst, and so the conversation could get pretty intense around the dinner table.
Usually, I could follow along, but when he started talking about the "credibility gap," I got a bit lost.
Having been raised on the folklore surrounding George Washington, I just couldn't believe that a president would ever lie. And so when my father said Lyndon B. Johnson had a "credibility gap" when it came to what he was saying about the Vietnam War, it just didn't compute.
(Did I mention I was only 10 or so at this time?)
Presidents, of course, aren't the only ones who can end up with credibility problems.
We took a look at a tech company with a huge credibility gap back on Jan. 10.
We saw how they were always making excuses rather than money. And I told you to avoid any hype you heard regarding a "turnaround" in the making.
Turns out, my prediction was dead on the money. Since then, this company has been hit by wave after wave of bad news.
Investors who ignored my warning paid dearly for doing so. This once-proud company's stock has fallen by roughly 24% since.
Today, I'll show you exactly what went wrong – and why avoiding losers is so important.
In fact, if you want to make enough wealth to provide for a secure retirement, it's absolutely crucial.
Mind the Gap
On paper, Japanese tech giant Toshiba Corp. (OTCMKTS: TOSYY) looks like a safe bet.
After all, it provides business services like cloud computing and counts Microsoft Corp. (Nasdaq: MSFT) and IBM Corp. (NYSE: IBM) as key allies. It makes laptops, tablet computers, external storage devices, memory cards, flash drives, and monitors.
As a veteran tech investor, I have followed TOSYY for years. And I've done the same as a tech consumer. From the late 1980s to the late 1990s, I owned several pieces of their gear, which included my main TV monitor.
But a few years back, I began to replace those devices with those made by upstarts like South Korean giant Samsung Electronics Co. Ltd. And so did millions of other Americans, making Samsung a bona fide global electronics giant.
In other words, Toshiba lost its edge in its core markets years ago.
Since then, Toshiba has attempted big bets in other areas – and, to be honest, not all of these new forays went kerplunk.
But the ones that did were so expensive that it's like someone snuck into Toshiba's headquarters one night and set up a series of time bombs in the balance sheet…
Here Come the Excuses
For the last two years, Toshiba senior execs have been revealing problems – and then insisting that the worst was behind them.
That's what happened last year when Toshiba took $1.3 billion in losses for an accounting scandal. Around that time, I began to hear whispers that Toshiba was putting its problems be…
About the Author
Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.