Better Right than Rich?
Sometimes I long for the academic world, if only for the access to all those bright, energetic young slaves ... er, research assistants. If I had a pile of them today, I'd set them to work helping me with a pet theory I've got, which is that many "investors" out there prefer feeling smart to making money.
What I'm saying is this: They'd rather be right than rich.
Don't agree? Then how do we explain the amazing cults that follow certain stocks out there, despite the fact that the companies do nothing but burn cash? The zealots of a certain Internet closeout retailer come to mind, but they're just the tip of the iceberg. How about the Wi-max blimp fans? The nano bag-holders at Altair Nanotech (Nasdaq: ALTI)? The easily excited advocates of Capstone Turbine (Nasdaq: CPST), FuelCell Energy (Nasdaq: FCEL), or ever-adaptable, "we're into whatever the hot alt-fuel tech is this month" Hawaiian hottie Hoku Scientific (Nasdaq: HOKU)?
They make the "the future is here today, and I'm getting in on it before the rest of you cavemen, so nyah nyah" crowds who fawn over Intuitive Surgical (Nasdaq: ISRG) and iRobot (Nasdaq: IRBT) look positively rational by comparison.
Psych majors looking for a project idea, give it a thought (or let me know if there's already research out there that covers this). Why do people routinely risk their dough on the future they think they see, knowing full well that, on the whole, we are all terrible about predicting the future?
Is it because we want to be rich? Or is it because we get a kick out of thinking we're smarter than the average bear?
The answers would get to the core of investing vs. speculating.
Comments? Bring them here.
At the time of publication, Seth Jayson had no positions in any company mentioned here. See his latest blog commentary here. Intuitive Surgical and iRobot are Motley Fool Rule Breakers recommendations. View Seth's stock holdings and Fool profile here. Fool rules are here.