Re: Addlebrains
ad?dle?brained adj. having a muddled or confused mind; foolish, silly, or illogical. [Random House Dictionary; Second Edition Unabridged]
The best part about addlebrains is that, by definition, they don't recognize their own folly. To them, a cogent and biting retort is "Prove it to me."
Can you imagine if their "prove it to me" strategy ever caught on?
"Honey, the National Weather Service is reporting that hurricane Floyd is bearing down on us. They suggest we board up the trailer and move inland."
"Prove it to me. I ain't goin' nowhere."
"See that guy walking towards us on this deserted street with his hands in his pocket? I recognize him from his picture on the wall in the Post Office. I suggest we duck in here."
"Prove to me he's the same guy."
And of course:
"A respected national news service just wrote that the CEO of the company you're thinking about buying shares in spent 10 months in a federal prison after being convicted of wire fraud, has recently been sued by the FTC, and a federal judge has just ordered him to pay $613,110 to 100 customers he defrauded at an Internet company two years ago. Maybe you should reconsider."
"Prove to me he won't do it again."
And what exactly constitutes "proof" anyway? A good deal of cosmology is based on Einstein's Theory of Relativity, yet it is still possible to disprove it (see generation.net.
DNA tests showed that there was a 99.9% chance that OJ Simpson's blood was found at the murder scene. Yet a jury found him not guilty of murder.
The point is, life is not about "proof". Life is about probability. When we accede to surgery, we do so knowing that, left untreated, there's a greater risk the disease will kill us than the procedure itself. When we choose to live in a flood zone, on a fault line, or near a nuclear energy plant, we often do so not because we are sure disaster always strikes the "other guy", but because we figure our quality of life will exceed the possible risk of calamity.
Investing, like life, is not about proof. Investing is about probability. How will my investments be affected by interest rates, a tax increase, a war, etc.? Is the stock overbought, oversold, meeting resistance, ready to break out, etc.? Should I buy on news or sell? Even after the fact it's often difficult to know what the "right" answer truly is. For example, if you bought because you expected earnings to exceed analysts' expectations, and they do, yet the stock goes down, should you change your strategy if put in a similar situation?
But what about stocks, such as those on the OTC, that are startups, have no earnings to speak of, sparse SEC filings if any, no analyst coverage, etc.? Here, it's all about "red flags". Red flags are proof of nothing; they are merely warnings. Experience has taught me that the more red flags, the higher the probability the investment will fail. Examples of red flags include: vaguely worded press releases, aggressive accounting, related-party transactions, mysterious assets, and, of course, a litany of failed companies for, and civil judgments against, the principles. Ignoring even a single red flag for an OTC stock is like ignoring a single roach in your kitchen. Where's there's one there's probably more.
Which brings us back to addlebrains. Addlebrains ignore red flags. Addlebrains not only ignore reality, but focus on the extraneous. For them, people that point out red flags are "bashers" who are part of a big conspiracy to hurt their cherished investment through manipulation and chicanery. The don't allow the fact that they may not have done proper due diligence to enter their mind. They equate criticism of their investment as criticism of themselves. Rather than confront the facts in question, they crusade against the messenger in a vain attempt to salve their wounded egos. All the while their investment does a swirly around the bowl.
In 1674, the French poet, Nicolas Boileau-Despr‚aux, wrote "However big the fool, there is always a bigger fool to admire him." I'm pretty sure if Boileau-Despr‚aux were alive today, he'd have gotten a kick out these investment chat boards where addlebrained individuals can step to the podium at will and fiddle as Rome burns-- and attract an audience. True, many of us are only there to see the reaction of others when they turn around and notice the ashes, but, hey, true sports fans hang around even after the game has been decided. Not to worry, though, there's always another game. And maybe next time the addlebrains will be right. At least that's what we want them to believe so they'll keep playing. ;^)
- Jeff |
