FUN and Web Investment Advice

[The Interpreter]

A great example of why not to take as gospel investment advice merely because it is on the Internets:

Investors love low priced stocks. Investors love dividends. What happens if you combine the two criteria? WallStreetNewsNetwork.com just came out with a list of over 25 stocks selling for less than $10 per share, with market caps over $250 million, and yields over 10%. Many of them were closed end funds, but several are businesses, such as Cedar Fair LP (FUN), the amusement park and water park company, which just went ex-dividend. Based on its latest quarterly payment of 25 cents, it yields 14.6%....

http://seekingalpha.com/article/172171-two...ll-for-under-10

What's wrong with that picture? As the quote says, FUN just went ex-dividend (meaning the current dividend will not be paid if you buy it now). BUT, FUN announced at its last conference call that it is expecting to suspend its dividend (which the author seems blissfully unaware of). If you relied on this advice to buy FUN and get a 14.6% yield, you'd be shocked when your units got a dividend yield in the near future on the next record date of 0.0%!

By the way, the market is surging today. For whatever reason, as of this writing, FUN is down more than two percent...

[Captain Picard]

Never fall In love with a stock. I think there is a member or two here that has for FUN.

I wonder if it's going to hold at 6 bucks or is the bottom going to fall out of it?

[The Interpreter]

Not to mention that the price of a stock, standing alone, says exactly nothing. That a stock sells for 61 cents or $2,600.58 per share tells me exactly nothing. What is the total number of shares outstanding? Authorized? Prospects for the future? Others' perceptions of prospects for the future? Outstanding debt? Future macro-economic outlook? Income potential? And on and on....