This is a great event to watch and every year I write about the same subject as a parallel to investing about using the wrong tool for the job. For as long as I have been watching this event, NASCAR driver Robbie Gordon has participated with a modified Hummer H3 and every year he has serious problem with the vehicle. For whatever reason the Hummer H3 simply appears to be the wrong vehicle for this race. Last year was almost an exception as he was in contention late in the race when he was disqualified because of his inflation system. The race organizers said it was illegal and Gordon says they did not understand the technology.
On the first stage of this year's event Gordon got stuck going over a dune and broke his gearbox. They were able to get it fixed but he finished in 137th place. It certainly is possible that he can overcome the lousy start but this sort of thing happens every year for this vehicle--it is not his driving as he has had success in the various Baja races.
Maybe the Hummer H3 is not the wrong tool but it seems like it is and I do think there is a parallel to investing. Many investors use products they probably shouldn't or strategies they probably shouldn't with the consequences ranging from small losses to life altering blow ups. Professionals are not immune from this either. I've said many times that I am a sucker for a good story but I realize this and avoid stocks where the entire thesis is a great story.
Here is an example from yesterday and this article about Urbana Corp. It is some sort of Canadian investment vehicle with stakes in the NYSE, CBOE and the soon to be publicly traded Bombay Stock Exchange. As best as I can tell the US trading symbol is URNAF but you are on your own for figuring that out.
I am generally a believer in the publicly traded exchanges for several reasons and have written before about why there should be, but is not, an ETF that just owns the global exchanges (the two capital markets ETFs that I know of are broader than just exchanges). This Urbana has a net asset value that per the article is about twice the current price but it is a penny stock/micro cap and while the concept is intriguing (and I do find it intriguing) it is an easy decision to know I am not going to bet client money that I can figure it out. This is not my type of trade, maybe it is yours, but it is not mine and the problem is not missing out if the thing skyrockets but instead would be not realizing I didn't understand it and bought anyway.
The first picture is of race leader Carlos Sainz' Buggy (that is the name of the vehicle) that I think is new to the race. The second picture is from the truck class which is my favorite and the third picture is a Land Rover which hasn't had much of an organized presence in the race recently (FYI the Defender 90 is going to start being sold in the US in two years, hope that is true).