Lesson: While hatred may FEEL good, it’s not the best premise for a winning investment strategy. – Ilene
Betting Does Not Equal Investing
Courtesy of Jake at Econompic Data
According to Dilbert creator Scott Adams (via an interesting WSJ piece ‘Betting on the Bad Guys’):
When I heard that BP was destroying a big portion of Earth, with no serious discussion of cutting their dividend, I had two thoughts: 1) I hate them, and 2) This would be an excellent time to buy their stock. And so I did. Although I should have waited a week.
People ask me how it feels to take the side of moral bankruptcy. Answer: Pretty good! Thanks for asking. How’s it feel to be a disgruntled victim?
On April 20, 2010, a semi-submersible exploratory offshore drilling rig in the Gulf of Mexico exploded after a blowout and sank two days later, killing eleven people and causing a massive oil spill threatening the coast of Louisiana, Mississippi, Alabama, Texas, and Florida.
It is very possible they are, but I can also see a situation where things get much worse in the gulf and for BP, which brings me to my next point. Buying purely out of hatred is 100% not an investment decision, but rather (as the title of his article says) betting. I personally love betting, but I keep that to non-investment related matters (anyone think the Celtics are winning the series?).
But don’t say Scott didn’t warn you:
This would be a good time to remind you not to make investment decisions based on the wisdom of cartoonists.
And this:
Again, I remind you to ignore me.
Source: Yahoo