When 'Buy What You Know' Doesn't Pay

This column was originally published on Street Insight on Dec. 12 at 9:05 a.m. EST. It's being republished as a bonus for TheStreet.com and RealMoney.com readers. For more information about subscribing to Street Insight, please click here.

In October, when I offered my list of the five worst-managed companies in the U.S., I also had considered several other companies for the honor. But I decided to create a separate list (four companies and one sector) with one thing in common: They have great products, but are bad investments.

We've all heard the Peter Lynch mantra: "Buy what you know." Buying what you know, however, doesn't excuse you from properly researching a company. Just because a company makes a fine product doesn't mean it's not managed poorly or heavily dependent on a single product or subject to a host of other maladies that could singe its stock.

My list could be longer, and you may have your own favorites. Also, note that these are bad investments but could be a decent trade from time to time. Here they are: ...