A Mole, Investing In A Hole

I first discovered the band U2 early on in highschool. I bought all the records/tapes/discs along the way and have plenty of their songs on my iPod. They are one of my favorites. The band has become socially and culturally relevant for several reasons as their popularity has given them a platform for many other things.

From an investing standpoint you may be aware of lead singer Bono's affiliation with Roger McNamee and a couple of other people in the investment firm Elevation Partners. McNamee has been on CNBC a few times since the formation of Elevation Partners to talk primarily about their investment in Palm and the merits of the Palm Pre.

You probably know that except for about ten minutes the market place never cared about Palm Pre and that the stock has been crushed as a result. In addition it appears that Elevation is down big on investments in Forbes and Move.com. This bad luck or poor decision making has caused 24/7 Wall Street to call Elevation Partners "arguably the worst run institutional fund of any size in the United States." Here is a link to a related story from the Biz Journal that has other information.

Obviously I have no basis to know whether it is the worst run fund or not and obviously McNamee and the rest of the investment professionals did not get to where they are being idiots. I'm not sure what has gone wrong but obviously risks were taken that have not worked out thus far.

If guys with very good track records can misfire than anyone can misfire. Funds like Elevation Partners will probably become more easily available in the future. Some will be great and some will stink. This is not my preferred vehicle obviously but as they proliferate some folks may be interested in giving it a shot. It is important to realize that there is no stop order available. Your money is locked up for some period of time and that is that.

These types of pools, assuming I am right about being available to more people, make things far more complicated than a mix of stocks and mutual funds. To repeat from many past posts, I prefer simple whenever possible in all aspects of life.

My wife and I saw U2 in concert in December 2001. Among other things it was right after the Diamondbacks won the World Series. During the encore Randy Johnson came out on stage with the World Series trophy and the place went berserk. Obviously it made a big impression.