Bad advice

My dumbest investment was buying stock in a wind energy company on the recommendation of a TV stock guru. The stock dropped like a rock two days later. He made his money! — O., online

The Fool responds: Even skilled investors make some regrettable moves, but the problem with many investing pundits is that you never know just how good they are. Some may indeed be buying into various companies and then talking them up, which helps boost their value if others buy in. (Later, whenever they sell their shares, you rarely hear about it.) Even with trusted stock gurus, though, it’s best to add your own research and thinking to theirs and to make your own decisions instead of just following them blindly.

Don’t judge a stock by its performance over only a few days (or even months), either. The company you invested in has been a penny stock (with shares

priced below about $5 per share) for most of the past decade. It’s always best to steer clear of penny stocks, as they tend to belong to younger, smaller and often unprofitable companies. Its share price has recently been below $0.01 per share, and it executed a 1-for-5 reverse split recently, leaving shareholders with one share for every five that they used to own while boosting the share price five-fold. It’s often companies in trouble that do reverse splits, partly to make their share prices look more respectable.