Top Five Unreasonable Stock Picks

irrationalI spend a fair amount of time in this blog advocating the benefits of long-term investing with index funds (click here to see how I set up my own Roth IRA with Index ETFs). For a change I thought I would offer up a list of my unreasonable and irrational stock picks; companies that I wish I was bold enough to throw some venture capital at to see what would happen:

1) DRDGOLD Limited (NASDAQ: DROOY): I have always had a fascination with precious metals and with gold mining. DRDGOLD is a company that engages in the exploration, extraction, and mining of various gold reserves in South Africa. Despite many setbacks, this company supposedly has access to rather extensive gold reserves that are ripe for the mining. This is obviously a shaky investment at best, but one I would throw some money at if I had venture capital to burn.

2) Crystallex International Corp. (AMEX: KRY): Crystallex is in the same boat as DRDGOLD as far as I am concerned. It is another example of my unhealthy interest in mining and precious metals. Crystallex is sitting on a large gold reserve in Venezuela, but the company is held back from mining operations by political forces in that country. For the last several years, Crystallex's stock price has fluctuated with the impending news of permission to mine the Las Cristinas location in Venezuela, which is constantly being blocked by Venezuelan President Hugo Chavez.

3) Atari, Inc. (NASDAQ: ATAR): As a child of the 80s I grew up playing the Atari 2600. As an adult I would love to own a piece of my childhood by owning some Atari stock. Atari, however, seems to be polishing the brass on the titanic and struggling to stay afloat in the sea of high-tech video game systems such as XBOX 360, Playstation 3, and Nintendo Wii. Until Atari breathes its last, though, I would still like to have this one in my portfolio just for its retro-coolness.

4) Motorola, Inc. (NYSE: MOT): I love communications technology. And while Motorola is not the technology leader that it used to be, it is still a healthy company and one that I consider to be emblematic of the 20th century ideal of technological progress. I have owned countless Motorola products over the years, and it would be just plain fun to own a piece of this communications giant.

5) Berkshire Hathaway Inc. "A Shares" (NYSE: BRK.A): My inclusion of Berkshire Hathaway on this list of irrational stock picks has absolutely nothing to do with the viability of Berkshire Hathaway itself. It rather has everything to do with the share price alone. What is not to love about a company that trades at well over $100,000 per share (for the A shares, at least, and quite a bit less for the B shares)? Were I wealthy beyond wealthy, I would have to own at least one share of Berkshire Hathaway for sheer bragging rights that I own a share of this coveted security.

So there you have it, folks: my top five unreasonable stock picks. If you would like to take a look at some of the stocks I consider to be most promising, then take a look at my other list of Top Five Individual Stocks.

And while I include these lists on mainly for fun, I am overall an advocate of long-term index fund investing, and I do not advocate throwing your investment capital around as willy-nilly or as casually as these stock pick lists might indicate. Be smart with your money, invest it in long-term index funds, and then when you have more money than you know what to do with, feel free to engage in this type of reckless speculative investing. Stock picking may be fine for Warren Buffett, but stock picking can be disastrous for the everyman.


Anonymous said...

Why not buy Berkshire B-class shares? they're only about $4,400 right now -- you might not buy too many of them, but one or two are a possibility. Because Berkshire owns so many other companies (partially or in whole) it's more like a mutual fund than it is like an individual stock: it doesn't stray that far from your philosophy of buying index funds.

Besides, Brk-B outperformed my Vanguard Target Retirement 2035 by a wide margin over the last 12 months.

Terra Andersen said...

I've always wanted to purchase a share or two of Berk, but it just never seemed right, when I could purchase a larger share of another company. Perhaps when there is a few million lying around, I'll then consider it.

I also agree with the previous commentor... You could always buy B-Class shares, and they tend to perform well even during tough economic times.

I liked this list a lot, by the way! esp. Atari. *=)

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