Worst Investment Ideas of 2014 (so far)



My Sunday Washington Post Business Section column is out. This morning, we look at the worst investing ideas of the year.

The print version had the full headline Where dumb money goes; the online version is the worst investing ideas this year.

Here’s an excerpt from the column:

“Here is the first half of my top 10 list of dumb investments ideas for 2014 (check back at year’s end for the rest):

Athlete IPOs. This year, San Francisco 49ers star tight end Vernon Davis IPO’d. Fantex Brokerage Services agreed to buy a 10 percent cut of all Davis’s future earnings for $4 million.

There are so many reasons this is a not a good investment idea, but let’s limit our discussion to three: 1) You have limited ability to pick which companies are going to do well; what makes you think you have any ability to guess what any athlete’s future income stream is going to be? 2) Even a minor injury can end an athlete’s career. In the NFL, the average career is short — either 3.2 years or almost 6 years. 3) Even if the 29-year-old Davis stays healthy, for investors to make money, he needs a giant new $33 million contract (according to the Fantex risk factors), plus he must “attract and retain endorsements, then generate other brand income post career.” Again, the thought of most investors getting this calculation correct is laughable..”


Check out the other bad ideas in the full article.


Worst Investing Ideas This Year.
Barry Ritholtz
Washington Post, July 6 2014  

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