We all know that those who engage in supposedly sane and rational investment strategies often end up losing their shirts. So some of us wonder are there crazy or even insane investments that could pay off?
This idea isn’t as preposterous as it might sound. The legendary Wall Street genius, Ben Graham, liked to describe the market as mad. Graham even used an imaginary madman named Mr. Market to personify how the stock market works.
There are some crazy investments that can make money, and some of them are actually publicly traded. You can invest in insane and weird stuff without having to venture into the snake pit known as the Over the Counter Market. There are even some giant corporations that are pretty crazy.
Is Mickey Mouse Insane or a Genius?
One of the craziest publicly traded companies out there is now considered an American institution: The Walt Disney Company (NYSE:DIS). Even though it has a reputation for wholesome family entertainment, Disney has always made its money on the bizarre. Its original fortune was built on a cartoon mouse and animated dwarves. In recent decades Disney has made piles of money off of talking cars, talking fish, pirate movies based on a wacky theme park ride, and half-naked pop singers.
Disney’s madness, or brilliance, has been exemplified in recent years by buying Marvel Comics (Thor, Iron Man, Spiderman, The X-Men, The Avengers, and many more) and most recently George Lucas’s Star Wars Empire for $4.05 billion. These investments give Disney thousands of characters to turn into money making merchandise and games for decades to come. They’ve also done well for the company’s share price.
Disney is crazy, but it’s crazy in a way that makes money. If spending money to get the rights to mutant superheroes and Jedi Knights isn’t crazy, I don’t know what is. Yet the video sales for Avengers movies and the piles of Star Wars toys for sale show Disney might be on to something.
Another crazy investment for those with money to burn is Chipotle Mexican Grill Inc. (NYSE: CMG). Chipotle is crazy because it makes a fortune selling a product, burritos, that you can buy on any street corner for $1 to $7 apiece. Not even the lousy economy and the Great Recession seem to have hobbled Americans’ taste for overpriced foods.
Insanity in Detroit
Another crazy stock is General Motors (GM); yes, current car sales in the U.S. and China are great, but GM still has its problems. The company is heavily invested in Europe, where it can’t even maintain a 5% share of the German auto market with the legendary Opel brand.
In North America, GM has those huge pension obligations past management racked up buying labor peace from the United Auto Workers. Those still exist, and they haven’t been dealt with. Does anybody remember that GM was bankrupt just four years ago?
The truth is that Disney looks sane when you compare it to GM. General Motors incurs huge costs whether an auto plant makes money or not. Disney can simply hold on to characters that don’t make money until some creative genius figures out a way to make money off of them.
As you can see, these stocks aren’t that weird or exotic, yet they’re pretty crazy. The entire market seems to be crazy these days, so perhaps you have to be a little crazy to make money in today’s market.
About the Author
Daniel G. Jennings is a professional freelance journalist and a longtime resident of Colorado. Jennings has a BA in History and an MBA. He has worked as a newspaper journalist, financial specialist, an accounts payable professional and newspaper editor.