A new style of financial advice: showcase only the stocks that were enormous losers and led to financial catastrophe!


A huge number of books, blogs, and web sites have been written to supply investment advice to the common people.

Almost all of these books recommend strategies that, up to that point, have been successful. Strangely, very few of them recommend strategies that have lead to catastrophic financial failure, even if the strategies behind these investments are conceptually sound.

For example:

  • A reasonable sounding theory: “Energy will always be required in the modern economy. Thus, it isn’t a bad idea to have some money tied up in this reliable sector.”

Yet these never follow up with:

Or in ~2001:

  • “A new segment of computing is clearly in small wireless devices: perhaps a fusion of the cell phone and notebook computer: some sort of ‘smart’ phone.”

Yet these, too, never follow up with:

  • “So a savvy investor would choose the company at the cutting-edge of this market: Palm, Inc.” 

The Issue:

The problem with this style of financial advice is that almost all of the examples are just survivorship bias: they cherry-pick the successes (“Apple computer, it was so obviously going to be a success!”) and ignore all of the companies that didn’t survive (“Wang Laboratories: it’s been around since 1951, it definitely has the expertise to be the next big thing in computing!”).

This is similar to writing an investment guide about betting on a roulette table: if a spin comes up red, you might expect dozens of financial bloggers and “influencer” analysts to write long treatises explaining why, in this particular situation, clearly it was time for “red” to shine.


In order to balance out these examples of sensible-sounding-yet-unsupported financial advice, we need a blog that offers superficially reasonable advice that, when tested with real data, always resulted in disaster. The real world is full of useful examples

  • The pitch: Early 2000s: “CPUs are crucial to modern products, but they’re held back by legacy engineering requirements. A new line of re-engineered chips (by a major company) that can make a clean break with the past will unlock vast computing potential!
  • The reality: the Intel “Itanium” chip never catches on, and is a financial flop.
  • The pitch: Mid-2010s: “Microsoft is a huge tech company that can integrate their OS with a new phone ecosystem, for the ultimate in synergy. If they entered the mobile phone market, they’d be almost guaranteed to succeed (Figure 1).”
  • The reality: the Windows Phone mobile OS never manages to crack the market, which remains split between iOS and Android.

Crucially, both of these products failed on their own merits, and weren’t squeezed out by some “evil” competitor or by some kind of internal malfeasance.

Fig. 1: Windows Phone was considered by many to be an almost guaranteed bet: it had the backing of a huge company that had succeeded in similar spaces before, it could leverage phone-PC integration, and it had (seemingly) an unlimited budget. (Fortunately for investors, there was no way to buy stock specifically in “Windows Phone.”)

Market projections are also a popular way of showing that some random new technology (e.g. the personal jetpack, the Segway, some specific cryptocurrency, etc…) is going to get adopted.

The formula is: 1) combine things that have ALREADY succeeded with the new thing that you HOPE will succeed, and then 2) plot them on the same graph (Figure 2).

Fig. 2: This style of chart works for anything: just take your favorite new technology and show how it’s only been around for (say) 2 years, but it’s already got 2% marketshare. Now add a bunch of other technologies that took a long time to get going (the automobile, the airplane, phonetic writing, the camera, etc…), and you’ll discover that your new technology can’t fail—look at all the other unrelated things that didn’t fail! Here, we see that the Zeppelin is due for a resurgence.


It’s a bit surprising that this book / blog doesn’t already exist!

PROS: Would be easy to find examples in history: just search for all the stocks that became worthless, and then do some research on the circumstances on each eventually-worthless company.

CONS: It might be hard to monetize this concept: normally, financial advice can attempt to persuade you that it’s worth your time (and money), because you’ll be financially better off according to some bewildering charts. But if the advice entirely showcases failures, people might be more hesitant to pay for a subscription.