Stop buying crap
Everytime a scandal comes out with a company, investors say oh look a nice buying opportunity. I used to do the same thing (on caps not in real life).
1) The price of a stock is based upon demand. If nobody trusts it and nobody wants to own it, it can be a great "Value" but youll lose a lot of money on it if nobody buys it at a higher price than you (unless they pay dividends, but that never happens)
2) You're just buying a piece of paper with 1-5 letters on it if its all a fake.
3) These stocks ALMOST NEVER recover.
I can list about 15 chinese stocks (especially FUQI), and dozens of stocks in other countries (Even America) where people have lost a ton of money trying to pick up a "great value that was blown out of proportion by an investigation"
Its one thing if muddy waters investigates you (which still ruins your stock price). It's a lot worse when its the SEC
I don't know about you guys but if a stock has a P/E of 1 and a P/B of .000001, but the stock price never goes up....doesn't seem like such a great value to me.
Stop buying these companies, the risk/reward is terrible....especially when the company is already overvalued.