Sunday, June 6, 2010

Rooting Against Bond

In his 2006 book, Creators: From Chauser and Durer to Picasso and Disney, author Paul Johnson makes the observation that making people laugh is one of our more human and creative endeavors. Scott Adams of Dilbert fame embodies humor as creative experiment better than anyone - - expecially in the context of our modern work and business environments.

His investing guide in The Wall Street Journal over the weekend is a classic. Entitled Betting On The Bad Guys, Adams discusses his investment theory of investing in companies he hates. For a cartoonist who hates Apple and Wells Fargo - - one cannot argue with his track record. His current "hate target" is, you guessed it - - BP. Adams writes the following:

Apparently BP has its own navy, a small air force, and enough money to build floating cities on the sea, most of which are still upright. If there's oil on the moon, BP will be the first to send a hose into space and suck on the moon until it's the size of a grapefruit. As an investor, that's the side I want to be on, with BP, not the loser moon.

I'd like to see a movie in which James Bond tries to defeat BP, but in the end they run Bond through a machine that turns him into a "junk shot" debris to seal a leaky well. I'm just saying you don't always have to root for Bond. Be flexible.

How does the Adams "hate method" compare with other investment strategies? He compares his approach to seven other methods. From the "Track Record" (The universal truth of investing: (1) Past performance is no indication of future performance. (2) You need to consider a company's track record. All anyone knows about investing are fundamentally opposites.) to "But What About Warren Buffett?" (Buy quality stocks at reasonable prices and hold them over a long time period. Do you know who would be the first person to tell you that you aren't smart enough or well-informed enough to pull this off? Warren Buffett).

If you walk into a store and hate the employees or come across a company where you hate their business model, remember Adams and his "hate method" and consider investing

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