06.03.08
Great ideas do not often make for great investments
Growth investors like to talk about inventions and new ideas. The pull of growth investing is all you have to do is find a great company with a great product that will soon be big and you can just buy the stock and sit back for incredible gains. There are several problems with this thesis.
American Technology Company (ATCO: $0.93 -9.71%, market cap: $28.4M) was the first stock that ever interested me. I was into high-fidelity music at the time and it was in an industry magazine that I first read about its technology to use multiple point sources of sound waves to project sound to a specific location (rather than all around).
If I had invested in ATCO 11 years ago and held until today, I would have lost over half my money.
Disclosure: No position in ATCO.