Dilbert's Scott Adams on Betting on the Bad Guys

Warren Buffett has said many times that being so large (and eg able to buy billion dolar companies) actually makes it more difficult for them to make money - because there aren't many companies large enough to make a difference, and everybody already knows about those companies.

He's also been quoted as saying that if he only had a million dollars, he could double it in a year. I haven't seen him explain this specifically, but the idea seems to be to research companies that are not well known, because that's where you're more likely to find stocks that whose price are mis-valued. And this is the work side: you have to research all those stocks (not just the top 300 or so that have analysts following them), and you have to be sure (within a margin of safety) of your evaluation of their value (especially in terms of enduring competitive advantage). If they're selling cheap, with respect to your evaluation, you buy. It takes a lot of work, and self-confidence.

Funny how everyone talks about BP but doesn't mention CAM, RIG, ATPG, and others. If you're going to invest, find the companies that make better drilling equipment because their services are going to be needed for the relief wells and fresh mandates for higher quality drilling.

Funnier still is how we think BP is the "bad guy" when the U.S. hasn't developed a transportation policy that doesn't focus on driving your SUV 30 miles to a grocery store. It's hypocrisy at its finest. We've had a blowup in coal, oil, and shale in the past 2 months but we still need cheap energy.

Why not become a contract killer? For the price of a handgun, you can make over 50 grand a day! Why bet on bad guys when you can be the bad guy?

Interestingly, this half-sarcastic rant has brought up a question in my mind. Why not charge betters on crime for the crime? Why not charge shareholders for the crimes corporations commit?

Under "invest in companies you love", he seems to define such companies as those with good sales pitches. But what about the more sensible definition, companies with passionate users? Anyone who invested in the obvious ones (Amazon, Google, Netflix, and Apple, for example) would have made a killing. On the other hand, take Comcast, the Consumerist's "Worst Company in America" for 2009. Comcast's stock has been stagnant at best.

True. I realized this a while ago and my life is a lot less confusing. I've dabbled in media long enough to know it's more magic than reality. When you need to find, shoot, and edit a piece in less than 24 hours on a limited budget the truth stretches as much as your dollars do (this varies on whether your producer is Lucifer himself or not). Long story short I'm not involved in media anymore, you should spend your time on things you hate loving versus things you love hating, and read HN.

If you really want to bet on the bad guys, invest in the companies behind BP and this oil spill. Such as Halliburton. Some people are speculating that BP will fold from this disaster due to the enormous projected cost of cleanup (10-30 times the cost of Valdez).

Funniest line:

"CEOs are highly skilled in a special form of lying called leadership"

wrong + wrong + irony != right

Consider the relativity of hatred. He gives as one of his examples, Apple Inc., which he claims to hate, and therefore uses that to "prove" his point (buy stock in companies you hate). By his reasoning I should have avoided Apple's stock because I like Apple.

Really though, this is a fantastic article, and I think the best bit of advice is at the end:

  Again, I remind you to ignore me.