| In my view, this incident created a threat to Equifax's very survival. It represented a clear change in the outlook for the company's business. I didn't own Equifax at the time, but I did sell the stock short (via options) immediately following the breach. I covered my position after a few days with a 48% profit. Nearly two years later, Equifax's share price still hasn't recovered. The company faces one of the largest class action lawsuits in history. As with BP, Equifax is shouldered with a huge and uncertain liability. That means that no matter how far the stock falls, I wouldn't be a buyer. And if I owned it, this is the kind of situation in which I would sell. (More aggressive investors might pounce on a situation like this; my style may not necessarily be your style.) Taking a Powder The latest mega-cap company affected by a potentially large but as-yet unknown liability is Johnson & Johnson (NYSE: JNJ). The health services giant is getting hit with judgments that claim that its talcum powder has caused cancer. (I seriously doubt this is really the case, but the potential liability is huge.) JNJ is saddled with a massive reputational crisis to manage, as it tries to win back the trust of retailers, customers and investors. The company has embarked on an ambitious public relations campaign to tell its side of the story. How well that PR plan is executed will determine how JNJ stock trades throughout this year and beyond, as the company grapples with the inevitable torrent of lawsuits and government investigations. I did own JNJ but sold it last year at the first sign of trouble. Perhaps JNJ will come out of this crisis just fine, and investors can pick up shares at a nice discount. But there are too many other opportunities out there that don't have this kind of uncertainty hanging over them. Never underestimate the persistence of trial lawyers. Coal's Twilight Finally, let's consider an entire sector. I started to believe that the coal sector's prospects were growing dim about a decade ago. Governments around the world were passing laws designed to limit carbon dioxide emissions. At the same time, cheap natural gas and renewables began to put a lot of pressure on the use of coal in the power sector. As a result, I have shunned the coal sector for years. For good reason, as a number of coal companies have gone bankrupt in the past decade. The one coal-focused fund I know about, the VanEck Vectors Coal ETF (KOL), has lost 67% of its value over the past decade. Still, some coal companies have survived and even thrived. Coal will still be in demand for years. But the market is contracting, and my style is not to try to pick a winner out of a basket of losers. I may be extra cautious about these matters, but you won't catch me ever trying to catch the falling knife of a company (or sector) undergoing an existential crisis. When there's smoke, I assume the fire is coming. And even if it doesn't, there are plenty of places where there's no smoke. | 
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