Invest Dangerously

Steve Irwin's passing over the Labor Day weekend was unfortunate. He entertained millions through daring entanglements with crocodiles, tigers, and snakes -- yet a freak stingray accident ultimately did him in.

Irwin isn't the only daredevil living on the edge to slip away unceremoniously. Harry Houdini made a living out of escaping near-death stunts, only to succumb to a ruptured appendix. Jacques Cousteau invented the Aqualung and explored great oceanic depths, but he eventually died of a heart attack caused by complications of a respiratory illness.

In a nutshell, even if you live dangerously, the simplest of things can take you out. Would the same theory then hold true for investing?

Invest dangerously
Most people want the highest returns while putting up with the minimal amount of risk. It's an unrealistic aim. Risk and reward are inversely related. If you want market-thumping gains, you are going to have to eventually go out on a limb.

Irwin, Houdini, and Cousteau can teach us that you can carve out lasting legacies by taking chances. They also have grimly taught us that you can still be stung when you least expect it.

Want proof? Think of the classic corporate blowups we've suffered through in recent years. Enron. WorldCom. Refco. Tyco International (NYSE: TYC  ) . These companies blew up despite toiling away in seemingly sleepy sectors. In that time, investors could have taken a chance on more adventurous equities, such as search-engine giant Google (Nasdaq: GOOG  ) and iPod wunderkind Apple Computer (Nasdaq: AAPL  ) , and made back their botched investments elsewhere several times over.

Investing is about taking chances. You can take precautions by diving headfirst into as much due diligence as possible, but in the end, there are no fire-retardant suits or lifelines in the marketplace. You are buying into a company convinced that the market will ultimately value it higher, but accepting that it can also go the other way.

Walkabout soup for the shareholder soul
Much has been said of buying stocks that let you sleep well at night. I wouldn't dream of it. I want to be agitated with the potential for greatness, rather than settle for steady drudgery that may very well implode anyway at the first whiff of an accounting scandal or a shady executive.

If you're going to invest, knowing that you are risking it all, why do it any other way but aggressively? I realize that that's the kind of stance that won't endear me to some of my fellow (and more conservative) Motley Fool analysts. I love them to bits, but if I'm going to invest with a mean streak, I may as well write that way too.

I don't want a stock that will bore me. I want to explore the wild secondary stock markets. I want to abandon the marked trail, headed into uncharted terrain to find "free range" growth stocks before they succumb to domestication by the masses. In a nod to Irwin, I want to find the next great investment before the rest of the market does. I'll belt out a "crikey, a stock me likey" before buying in and hopping on for the ride.

My portfolio is loaded with wild beasts and wildebeests. So is the Motley Fool Rule Breakers scorecard. Are you familiar with companies like LoopNet (Nasdaq: LOOP  ) and Universal Display (Nasdaq: PANL  ) ? It's okay if you're not. They have just a handful of analysts following them (three and five, respectively), and that's ideal. No one likes a crowded safari.

LoopNet runs an online marketplace for commercial real estate. Universal Display is a leader in organic light-emitting diode (OLED) technology. That's the ideal kind of quiet for observing growth stocks in their natural habitat, particularly when there's so much room for growth.

Some of the favorite stocks that I don't own at the moment are Jones Soda (Nasdaq: JSDA  ) and Hollywood Media (Nasdaq: HOLL  ) . You may recognize Jones Soda for its colorful pop and photographic labels. You may be familiar with Hollywood's ticketing site or its celluloid portal. If so, you're one up on the faraway market watchers; Jones Soda and Hollywood Media have fewer than five analysts following their quarterly moves.

That's opportunity. For me, that's investing. If the story makes sense, and the financials make even more sense, these are limbs that I don't mind going out on. I realize that Rule Breakers investing isn't for everyone. Yet after watching the way a few celebrities and even more of my fellow investors get tripped up by the simple stuff, I don't mind taking chances in pursuit of wild returns.

Invest dangerously, my friend.

Longtime Fool contributor Rick Munarriz believes in taking chances to earn superior returns. He does not own shares in any of the companies in this story. Rick is part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early. Tyco is an Inside Value recommendation. The Fool has adisclosure policy.

Read/Post Comments (0) | Recommend This Article (1)

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 507916, ~/Articles/ArticleHandler.aspx, 10/7/2015 4:03:43 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Rick Munarriz

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

Today's Market

updated Moments ago Sponsored by:
DOW 16,865.05 74.86 0.45%
S&P 500 1,991.73 11.81 0.60%
NASD 4,776.76 28.40 0.60%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/7/2015 3:48 PM
AAPL $110.49 Down -0.82 -0.74%
Apple CAPS Rating: ****
GOOGL $666.00 Down -5.64 -0.84%
Alphabet (A shares… CAPS Rating: ****
HOLL $0.68 Down +0.00 +0.00%
Hollywood Media Co… CAPS Rating: No stars
LOOP.DL $0.00 Down +0.00 +0.00%
LoopNet CAPS Rating: ***
OLED $36.09 Up +0.54 +1.52%
Universal Display CAPS Rating: ****
TYC $35.46 Up +0.29 +0.82%
Tyco International CAPS Rating: *****