Don't invest in crooks

The headline above might look like voting advice, and as advice for a voter on Saturday it is of course sound. More importantly though, how does a small amateur investor protect themselves against fraud, or find the true value of Enron or WorldCom, when the fraudsters are so good?

James Glassman points out that it's unlikely American companies have radically changed their ways since the fall from grace of these two paper giants.

Have corporations mended their ways since the scandals came to light? Don't count on it. American International Group, the giant insurer, on June 1 issued a new financial report restating five years of results and knocking $2.3 billion off net worth. Among the adjustments: AIG improperly counted tax credits, to the tune of $731 million, as net investment income, "a measure closely watched by insurance-industry investors," according to the Wall Street Journal.

But don't despair. There are ways to invest intelligently even in a market of deceivers. Here are some guidelines...