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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 a 35-year Silicon Valley veteran and one of the top technology financial analysts working today. He regularly delivers winning trade recommendations to the Members of his monthly tech investing newsletter, Nova-X Report, and small-cap tech service, Radical Technology Profits. In the past two years alone, his subscribers have seen over 100 double- and triple-digit gains from his recommendations.
As a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs and high-profile industry insiders. In fact, he was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon. And he was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
In addition to being a regular guest and panelist on CNBC and Fox Business Network, Michael is also a Pulitzer Prize-nominated writer and reporter. His first book, "Overdrawn: The Bailout of American Savings" warned people about the coming financial collapse - years before "bailout" became a household word.
You can follow Michael's tech insight and product updates for free with his Strategic Tech Investor newsletter.