Chances are if you've picked up a book on investing, you've come across a paragraph or two that warns you not to go against the grain -- that the trend is your friend. Generally this is true, but if your friends all jumped off a bridge, would you jump as well? Clearly you wouldn't, yet I see people taking risks similar to this that seem to me, unnecessary.

This sort of risk-taking has led to some pretty stern finger wagging from me when I see the bullishness surrounding Cobalt International Energy (NYSE: CIE). Morgan Stanley recently initiated coverage on the company and labeled it "overweight." Checking in on CAPS sentiment, 110 out of the 111 active picks are bullish on Cobalt, and I really am left wondering why?

Where's the beef?
Cobalt is entirely in the exploratory stages of its existence, yet it trades as if it has already billions of barrels in proved reserves. It has a market capitalization over $4.5 billion without removing one drop of oil out of the ground and is expected to burn $150 million in capital expenditures this year. So I'm left asking: Where's the beef?

The company is sitting on $200 million worth of deepwater leases in the Gulf of Mexico as well as leases off the West African coast of Angola. Despite many of these projects being in partnership with other big players in the drilling field, like deepwater producer Anadarko (NYSE: APC), I'm not convinced Cobalt has a cohesive enough management team to execute its plan and become profitable, even though all of its executives have 25-plus years of experience in the energy industry. I'm a firm believer that execution starts with a solid management team, and I'm not sold on this team.

Soros calls it quits
Now if George Soros were to jump off a bridge, I'd probably grab my parachute and jump off with him. Well, maybe not, but it's important to take heed to what an investing mogul like George Soros is buying and selling. Not surprisingly, in the third quarter, Soros' fund sold out of a nearly 6 million share position in Cobalt. I think this is just more fuel for the fire that Cobalt may not be the value that everyone seems to think it is.

It's also worth keeping an eye on Goldman Sachs (NYSE: GS), which holds a 21% stake in Cobalt. If Goldman were to lighten its load, which could be a possibility if Cobalt continues to pile up losses, Cobalt's stock could find itself under serious pressure.

Most everyone seems excited about Cobalt's prospects -- shares are up 66% in just three months, and the company just got a break by sub-letting a contracted rig from Ensco (NYSE: ESV) -- I say let's see some revenue generation first before we start validating this upstart.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.