Value Trap

You thought the stock was cheap at 7 times earnings. It was clearly a value...a bargain. At 7 bucks a share on earnings of a dollar, it screamed that it was a buy. But alas, it was a trap. Like Admiral Ackbar yelled in the first Star Wars.

Unfortunately earnings went not from a dollar to a dollar-twenty to a dollar-forty...but rather from a dollar to 70 cents to 30 cents to...whiffle ball. That "value" stock at 7 times earnings 3 years hence was at infinite times earnings of zero, and now, with the stock under a buck and in the process of being delisted, you can only sigh, wishing Admiral Ackbar had been your broker before you bought in at 7 bucks.