Garden path the long term investors were lead to., page-23

"I thought I'd made an informed decision to invest in SGH - the fact that the information I made my decision was incorrect is why I, and others in the same situation, lost tons of dosh."

Even if you're a brilliant equities analyst, you run that risk as soon as you click on the buy button.

The most recent of financial statements from the company might be saying one thing, but the reality of what is currently going on in the company can be something completely different.

A lot can happen in six months, and while directors are supposed to make continuous disclosure, that never seems to work out well for small investors - even when they do the disclosure.

It's a sad fact but a lot of the time the directors don't have enough skills to know what's really going on. Other times if there's a downturn they think something's wrong with the monthly management accounts, and there are delays while they get everyone to check everything. Often they think they'll ride it out until the following month when things will be back to normal (they hope) - I think a bit of that went on at SGH in 2015.

With SGH, if you read the Jun 2015 annual report, nothing looked too bad.

Just six months later, (1H 2016) they were reporting a loss of nearly a $billion.
Apart from the statement about cash flow in late Nov 2015 there wasn't much from the company for investors to work with in that time.

The analysts who were giving sell recommendations in 2015 were looking mainly at the Quindell business - they were saying that SGH had paid big for something that was worth very little.

The institutions and funds bailed out in late Nov 2015 while the SP was above $1. They did that after AG re-confirmed 2016 full year guidance, even though he had just previously said that they were having a big operating cash flow deficit (ie loss) in the 2016 first half.
The funds / instos decided at that point that he didn't know what he was talking about - only one of the two sets of figures could be right.

There's only one safe way of investing in equities I know - keep over half in the ASX top 50, spread your risk (never more that 10% in one stock), use stops / trailing stops, and hope you get more winners than losers.