Don't Be the Charlie Sheen of Investing

The following is merely opinion, and it's not intended as medical or mental health advice of any kind. We're investors writing for investors, not doctors writing for investors.

Investors have plenty to worry about these days: global unrest, spiking oil prices, food inflation, and a shaky economic recovery. Yet somehow, many of us remain transfixed instead by the decidedly colorful statements of Charlie Sheen.

The increasingly eccentric actor dispenses his "wisdom" to us through broadcast interviews, a red-hot Twitter feed, and any number of Internet memes. (I like the ones involving cats and baby sloths.) But as bizarre as Sheen's verbal gems can get, I think they nonetheless offer valid lessons for investors.

Last year, I diagnosed a subset of investors with Sirius Syndrome -- an irrational preference for rage over reason when it comes to certain stocks. Many of the comments Sheen's made in the past few days echo this attitude eerily well -- and illustrate the dangers of letting your id take the reins of your investments.

"My motto now is you either love or you hate, and you must do so violently." Just try pointing out any challenges facing Sirius XM (Nasdaq: SIRI  ) to the stock's loyal adherents. Go on. I'll wait over here in this flame-resistant bunker.

Sirius fans display overwhelming love for the stock, and plenty of vitriol for supposed "haters" -- even if those folks are simply pointing out reasonable concerns. Even if it has recently started eking out meager profits, the satellite radio provider must still contend with its ever-evolving competition, high debt load, and historical difficulty in operating profitably. But if you try telling die-hard Sirius devotees this, expect to feel their violent love and hate in full force.

"We are high priest Vatican assassin warlocks. Boom! Print that, people!" Delving into conspiracy theories like this one never seems to do investors any favors.  In 2005, Overstock.com (Nasdaq: OSTK  ) CEO Patrick Byrne conjured visions of a sinister cabal of Sith Lords responsible for shorting his company's stock. (For more information about this duel of the fates, we've got the questions we posed Dr. Byrne, and his answers, in our archive.) Today, I'd say Overstock's biggest threat comes from its heated rivalry from Amazon.com (Nasdaq: AMZN  ) , rather than any shadowy figures from the dark side of the Force.

"I'm tired of pretending like I'm not special." Join the club, Charlie! I'm sure we all think we're pretty special. That's precisely why it's always polite to listen to somebody else's opinion once in a while. The best investors can profit from a willingness to challenge their own beliefs.

"Defeat is not an option. CBS picked a fight with a warlock." Right about now, CBS is probably wishing it had learned the same lesson that every Foolish investor needs to take to heart. Unconditional love -- whether for a top-rated sitcom or a beloved investment -- can leave you vulnerable to unexpected disasters. (Like, say, "the talent" spiraling into increasingly bizarre behavior.)

Personally, I forgot Two and a Half Men was even still on the air. But the show that Sheen himself apparently called a "puke fest" remains the most popular and highly rated comedy on the tube. If Sheen's antics result in the show's cancellation, network CBS (NYSE: CBS  ) and producing studio Warner Bros., a division of Time Warner (NYSE: TWX  ) , stand to lose big money -- news that both companies' shareholders surely don't find funny.

A little too much tiger blood
I'm sure that many of us hope Mr. Sheen gets the help he's given every indication of desperately needing. His highly public behavior no doubt makes things difficult for his loved ones, not to mention his former coworkers on the now-shuttered show.

Like Sheen, investors can only hurt themselves by tightly tying their favorite stocks to their sense of self-worth, taking too much personal pride in their support for a given investment, and indulging in ugly rants and personal attacks on anyone who gives rational reasons to disagree. If their rash reactions ultimately lead them to trash their own portfolios, no amount of tiger blood, winning, or furious fists of fire will save them.

What's your favorite Sheen-worthy investing moment? Share with us in the comments below!

Amazon.com is a Motley Fool Stock Advisor choice. Try any of our Foolish newsletter services free for 30 days.

Alyce "Bring It!" Lomax does not own shares of any of the companies mentioned; for more on this and other topics, check back at Fool.com, or follow her on Twitter: @AlyceLomax. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool's disclosure policy is on a drug called Foolishness. You can't buy it, because it would make your entire face explode.


Read/Post Comments (36) | Recommend This Article (33)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 03, 2011, at 4:57 PM, Brent2223 wrote:

    Wow - is there any way that I can flag certain MF authors as spam so I can avoid these nonsense articles? I've come to expect the lack of content, but the tongue in cheek humour around mental disease in this article is truely insulting. MF would be a more enjoyable site without the authors - I come here for the thoughts and opinions of the other 'players' and have given up on any MF generated content.

  • Report this Comment On March 03, 2011, at 5:32 PM, EnigmaDude wrote:

    This is a classic. Charlie is providing such great media fodder, how can you resist quoting him!

    As for Brent2223, "the first one's free, the next one goes in yo mouth!"

  • Report this Comment On March 03, 2011, at 5:48 PM, samedge wrote:

    Wow - I wonder which commenter owns Sirius XM?

  • Report this Comment On March 03, 2011, at 6:04 PM, Tensed wrote:

    so i looked up the contenders for Sirus and none of them have actually made a profit, so now i am wondering how any of these companies exist?

  • Report this Comment On March 03, 2011, at 6:30 PM, southernbeachguy wrote:

    Wow Alyce, you didn't have any of your facts correct the last time that I read an article and you still have NO FACTS CORRECT. Hopefully MF is not paying you for your services, because you sound like you make up stuff as you write them.

    PS: You can't even spell your name correctly and over the past 2 years I am up over 307%.... that is 307% for my shares of Siri.

    Charlie Sheen is not my judge of stocks, PROFITS are...... oh, your not Charlie's type!

  • Report this Comment On March 03, 2011, at 6:35 PM, DucatiChic wrote:

    Brent...I'm with you. On Facebook there is a 'like' button. I wonder how you dislike an article. I'm one of those 'fools' who loves SIRI, owns the stock, subscribe etc... and I just get disgusted with the bashing of it.

    Can I listen to other opinions? Yes. Can I listen to someone who disagrees with me? Yes. Do I change my mind just because some article written by some random person or talking head says I should 'open my mind'? Most likely not.

    There are 2 people with Seeking Alpha who have said SIRI will do badly, crash or whatever and now there is someone with the Fool.

    I wish articles would say 'bashing SIrius' so I know NOT TO OPEN THEM!

    I was thinking I would see someone comparing something such as Borders or Microsoft or some huge corporation to Charlie Sheen (which in my opinion is bad taste, the man needs help and I personally feel sorry for him. Just goes to show that fame and fortune doesn't make someone happy!) but Sirius? who went down like SO MANY OTHER stocks and rebounded rather well and still looks promising (looks can be deceiving of course but I like to be positive about things). Amusing and irritating all in one.

    One day I hope all articles have a brief summary of what the content shows or says so that we can skim thru it and decide if it is really worth reading.

  • Report this Comment On March 03, 2011, at 7:40 PM, brandonmatthews wrote:

    Alice...you began with "last year I wrote."

    SIRI went up about 700% or so????

    I'd say bringing up your error a year later while poking fun at the thousands of investors that were correct on SIRI, was probably not a wise thing to do...

    just sayin...

    you've been wrong on it a long time...you know the definition of insanity dont you?

  • Report this Comment On March 03, 2011, at 7:42 PM, ItAintCool wrote:

    Alyce,

    So nice to see you bashing Sirius again. Let's see how the stock is doing today?

    Oh look up another 2.16% to $1.82. You've been bashing SIRI since the sub $1.00 mark and look where it's gotten you? Meanwhile I've made an 1,800% return on my investment.

    Maybe instead of looking at and attacking SIRI investors who seem emotionally attached to a successful stock you should be looking at yourself and the reason why you seem to dislike it so? The "facts you give" Let's go over some of the possibilities;

    1) You find Howard Stern offensive, so any company associated with it is jut as bad.

    2) You've been wrong on this stock for 2 years running and it has become such a thorn in your side that you can show nothing but contempt for it and those who believe in the company.

    3) Whenever somebody questions your faulty logic anytime you try to put down SIRI, people see you for the fraud you are. And when I say "faulty logic" I mean the cherry-picked items pieces of information your use while ignoring complete facts, all to try and make your argument seem like it holds water. Sadly your arguments hold as much water as a bucket made of screen door material.

    I just wish that Yahoo Finance would just list the names of the authors next to the articles. Personally I would never want to dignify giving your cringe-worthy writing another web-hit. But since most MF writers (short of Rick Murraniz) seem to be on a tear about SIRI - I'll just ignore the lot of you from now on.

    Hopefully all of you will do the same. Arguing with them and posting comments only gives them fuel for their fire to continue writing this tripe. The only thing these Fools fear is being ignored. If you're sick of MF bashing on SIRI, then stop visiting Motley Fool anymore. Their writing for the most-part are just a bunch worthless diatribes anyway.

    Last word Alyce; Howard Stern uses an audio clip of Charlie Sheen to describe the likes of you; "Winner!". You may take it as a compliment, fortunately any Stern fan will understand it's true context.

    See you at Satwavespro.com from now on.

  • Report this Comment On March 03, 2011, at 7:46 PM, SiriusFun wrote:

    Alyce,

    Recommend spending a little more time writing for your high school newspaper than publishing this drivel.

  • Report this Comment On March 03, 2011, at 7:56 PM, tomd728 wrote:

    The Motley Fool intent:

    "To educate,amuse and enrich."

    Is that not how it goes ? Well.....MF failed miserably on this effort.If only there were an accumulated discount for leaving certain offerings un-opened,then go ahead and drivel on !

    I could get the same quality of commentary and comments thereto at Yahoo or some other dreadful financial site.

    Advise such as: Don't take it personal....No personal attacks...No foul language........etc.are treated as "suggestions".

    Later guys and thank you for providing the fodder.

    Tom

  • Report this Comment On March 03, 2011, at 8:52 PM, TheDumbMoney wrote:

    I don't know whether the comments pertaining to this article are sad or hilarious. Chin-up, Alyce.

    My own personal opinion of Sirius is that it's just great. That is because it is by far the brightest star in the winter sky, and maybe in any sky (aside from the sun, or course, and the planets, which - especially Venus and Jupiter, are sometimes mistaken for very bright stars). It also twinkles strongly in bad observing conditions, even at times seeming to twinkle different colors, which is interesting! Sirius is near the elliptic, somewhat to the east and south of the constellations Orion and Taurus, if you are observing in the Northern Hemisphere. Don't be one of those haters who spends all of your time with Procyon or Cappella or the Pleides, people. All of those stars SUCK, and people who like them are total morons.

  • Report this Comment On March 03, 2011, at 10:04 PM, JaBeBuBo wrote:

    Wow, Alyce... you were right. Is there room in that bunker for one more?

  • Report this Comment On March 03, 2011, at 10:15 PM, mkriegel wrote:

    I only read the SIRI articles for the comments below.

  • Report this Comment On March 03, 2011, at 11:29 PM, grant224 wrote:

    Too bad the Fool isn't able to vett members more thoroughly.. most of the above commenters only exist/appear when Siri is mentioned and the only thing less relevant and more asinine than the above comments is this article itself.

  • Report this Comment On March 03, 2011, at 11:57 PM, gdf55 wrote:

    To the people up 700% in SIRI in the past year, congratulations on profiting off the dead-cat bounce. You really don't want to know how much money I lost on this miserable excuse for a company.

  • Report this Comment On March 04, 2011, at 12:17 AM, NewSiriFan wrote:

    If you don't like Sirius write your article, then shut up. "Don't poke the bear". Writing an article to complain that some Sirius fans can be rather pissy is irrational. If you have heard of or seen "Stock Shock" documentary you might understand why fans would take offense. Some commentators seem to try and push the price of stocks down. I'm not saying you are one of them. I only skimmed this story. But, if you have reason to believe you have something to say about investing in Sirius, like does it make sense or not, write, and you've done your job warning casual investors.

  • Report this Comment On March 04, 2011, at 12:51 AM, gdf55 wrote:

    "Writing an article to complain that some Sirius fans can be rather pissy is irrational."

    And, apparently, right on target.

  • Report this Comment On March 04, 2011, at 2:48 AM, sttho wrote:

    Here's the great thing about Howard Stern and SiriusXM; how I feel is irrelevent...

    Love him, or hate him, you know who he is. People who love him tune in to hear what he has to say. People who hate him tune in to hear what he has to say. Either way, it's money.

  • Report this Comment On March 04, 2011, at 6:16 AM, johnvanjohn wrote:

    Great article ! One reason I will not be a subscriber to Sirius (along with countless others) is because they support a fouled mouth moron (Howard Stern) he's crude and appeals to losers !

  • Report this Comment On March 04, 2011, at 6:45 AM, TMFLomax wrote:

    dumberthanafool,

    Thank you, I love it! You're right about THAT star! Awesome!

    Alyce

  • Report this Comment On March 04, 2011, at 8:56 AM, bottomfisherman wrote:

    Someone help me out here. Is this drivel or trippe?? MF needs to an add an "unrecomened button." Waste of time reading this I will never get back.

  • Report this Comment On March 04, 2011, at 9:02 AM, bottomfisherman wrote:

    Here is the great thing about Sirus: One could have and people did take $30,000 to buy at .05 a share and now that investment is worth 1,092,000 as of close of business yesterday. MF missed the ship on this great opportunity and that ship has now sailed without them. Now all they have is a jaded regret. Time to get over it.

  • Report this Comment On March 04, 2011, at 9:19 AM, catoismymotor wrote:

    After listening to what Charlie Sheen has to say I think he needs to hit the gym, get is muscles back from when he did the Hot Shots movies and join the WWE. He sounds like a fusion of Hulk Hogan and "Macho Man" Randy Savage. I'm sure Vince McMahon would welcome the added viewership.

    And for those of you that own share of SIRI you need to get over yourselves! It is a company that you have chosen to own. You made a choice to buy a company that takes some heat. It's not like your ethnicity or faith is being attacked. I don't hear the owners of MON whining about their stock being savaged in the media or fellow fools. I guess I'll hear next that you cant help yourself because you have a little too much tiger blood.

    The Warlock of TMF,

    Cato

  • Report this Comment On March 04, 2011, at 9:41 AM, TMFLomax wrote:

    Cato, I think your comment is truly winning! (The Warlock of TMF, nice!) And true enough, MON shareholders do take pretty hefty criticisms (also from people like me!) without too much verbal tiger bloodshed.

    Alyce

  • Report this Comment On March 04, 2011, at 9:43 AM, David369 wrote:

    Dang Alyce, hope you were in your flame resistant bunker. I don't know which is better your article or the comments. What are you going to do for an encore? Come on, stir them up some more....

  • Report this Comment On March 04, 2011, at 11:46 AM, TMFDiogenes wrote:

    For those commenters singing the praises of that luminous Sirius in the night-sky, I highly recommend this mind-boggling video:

    http://www.youtube.com/watch?v=Z7geP5ev0VI

  • Report this Comment On March 04, 2011, at 12:20 PM, edmond5 wrote:

    With the exception of dumberthanafool, Sirius shareholders = Charlie Sheen twitter followers. The quote I like most about his meltdown comes from John Stamos who was unfairly insulted by Sheen. Charlie says the show would suck if he's on it." John denies the rumor of being his replacement but adds "...however, Martin Sheen has asked me to be his son." Maybe there are some investment parallels with Liberty Media and Sirius? Good article Alyce!

  • Report this Comment On March 04, 2011, at 1:00 PM, mbl1234 wrote:

    I think it's a kind of maudlin-entertainment thing. There are a lot of apparently unstable conspiracy-theorist SIRI longs, and it's fun to have them froth at the mouth. So you poke them with the stick that is a non-glowing (ie. reflects reality) article about the company, and watch them convulse and spill their venom. It's predictable, but hilarious.

    I had XM for a littel over a year (including 2 three month extensions for free when I called to cancel). I think the product is a gimmick, not worth the price. The music wasnt anything to write home about, I don't like Stern and as far as all the sports, how many games or NASCAR races do people listen to on the radio? It's silly to think that's a draw. The only person I know who has it in their car kept it because he never called when he got his renewal notice for his new car, and they never turned it off. I think the slavish devotion and extreme opinions on what is a niche radio company is weird. Some of these guys think this is the next AAPL or MSFT.

    I also know that this stock is highly held by individual investors (ie. relatively uneducated), which means volatility, so I'm thinking about shorting any rapid percentage gains and taking profits there.

  • Report this Comment On March 04, 2011, at 1:06 PM, mbl1234 wrote:

    Also - perfect example of the loony venom spitting SIRI bunch. Marketwatch has an article about this 'Tiget Blood Radio' silliness, answered by a personal attack on the writer.

  • Report this Comment On March 04, 2011, at 1:21 PM, pscholte wrote:

    This article points to a key problem in financial writing. Maybe some of you more seasoned investors are immune to it; I am not. That problem is "pot-stirring." I don't know if the pressure to write something--ANYTHING--is too great or if financial writers are just sadistic, but nothing can be left well enough alone. If oil is up, then we have the guy/gal who writes, "Oil! About to come crashing down?" or if a stock is down for good reason, "A deep value play the whole world is missing?" It is great to receive sound advice, but I do get tired--after doing due diligence--and deciding to invest in crude oil futures, given the macro environment, to be greeted with, "Oil is topped out; $60 a barrel next? If it happened in isolated instances, it would not be worth commenting on; but, you can count on it, if item a is going direction B, there will be a naysayer out there stirring the pot with the result being investor confidence shaken. I am really tired of it.

  • Report this Comment On March 04, 2011, at 2:13 PM, OrionNebula wrote:

    Diogenes, also great to compare Canis to a galaxy, and a galaxy to the Virgo Supercluster, for example. We are truly small.

    edmond5, I am not a SIRI shareholder, but I appreciate that you do not think I am a Sheen Twitter follower. ... though I suspect most Sheen Twitter followers are wallowing in shadenfruede, rather than feeling any positive fan reaction.

  • Report this Comment On March 05, 2011, at 7:27 AM, TMFLomax wrote:

    TMF Diogenes, that's mind boggling all right. Brilliant! Thank you for posting that. Puts it all into perspective. ;)

    David369, I probably shouldn't reveal my whereabouts, but I think the only true flame-resistant bunker is one without Internet connectivity. ;) I have emerged!

    OrionNebula, have you heard the new term "sheenenfreude" -- I think maybe it's apt!

    When I heard about the Tiger Blood Radio news after I wrote this, I thought... the irony was just incredible.

    Best,

    Alyce

  • Report this Comment On March 10, 2011, at 8:43 PM, firemachine69 wrote:

    If Siri is such a mad buy, perhaps you should short it? ;)

    (No interest in Siri myself - Had no money when it was ten cents a share to jump in.)

  • Report this Comment On March 11, 2011, at 3:40 PM, tramagli wrote:

    When's he gonna shave his head?

  • Report this Comment On March 14, 2011, at 11:49 AM, clintspicks wrote:

    Great article. Very funny and very telling. All the crazy comments are priceless ... almost like it was all planned. Just perfect. I haven't read any of the other SIRI articles and without the comments here, I would've never have guessed that that's what this one was all about. Thank you, crazy people, for clearing that up, And enjoy your gains.

  • Report this Comment On March 15, 2011, at 2:27 PM, PenguinTrap wrote:

    "To Educate AMUSE and Enrich".

    For all the Alyce bashers, lets agree to chalk this one mainly up to "amuse". Sorta like reading a "Sheen- tweet". The latter sure as hell aren't meant to enrich or educate. Amuse? Yes.... kinda/sorta.

    And BTW, for all you Siri lovers claiming 1800% (or more) returns on what is now a 1.82 dollar a share stock, that means your average share price was around a dime a share.

    Really? I'm not so sure that's investing; to me it rather seems dumb luck. Occassionally I could get a similar return plunking down 2 chips on #23 at the roulette table. So congrats on being lucky (unless that approximates your entire portfolio return, in which case congrats on being very smart and unusually clever).

    How do you even begin to evaluate such an enterprise? I'm certainly no Buffet-Class investor, but I can't figure out how you'd reliably perform due diligence on this one. You'll note another losing quarter at the end of 2010, stacked on top of many, many losing quarters (or marginally profitable ones at best) before it - all on a stock valued now at around 60% of it's peak and funded with a huge debt load. Remember the dotcom crash in 1999/2000? An interesting and potentially revolutionary idea still needs to make money sooner or later or it's over. This one has been kicking around about a decade now with not much progress.

    Sooooo. When is the big breakthrough?

    Let's face it. Good radio is local (that doesn't mean all local radio is good, however and the necessary culling of the herd is well underway thanks to the great recession).

    Local talk, local sports, local news, local traffic, local taste in music and programming and yes, local ads that may be relevant to that for which you might be shopping. Cars. Concert Tickets. Festivals. Furniture. Lunch. Shoes.

    You name it and someone's selling (and advertisng) it. It's why XM got absorbed and why Siri STILL cant turn a steady profit (notwithstanding the ability to broadcast without the heavy hand of the FCC slapping em down at every turn - a competitive advantage over traditional radio if there ever was one).

    Even nationally syndicated shows (presumably those with the 'broadest' of broad appeal) run baskets of local ads on terrestrial radio. Why? They continue to work and belive it or not, it adds value. And no, I don't work in radio nor advertising.

    Face it. Like a mortgage you can't afford, it's just a matter of time before it's over for satellite - no matter how many bankers you involve. Podcasts and radio on demand won't make it any easier.

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