The Ignorant Investor

There's a reason I've recently turned almost exclusively to ETFs and index funds for my equity purchasing needs. Imagine you laid down ten or twenty thousand dollars on shares of Coca-Cola a year or so ago hoping new management would come in to give it a boost (not a crazy move- it's been one of the world's great brands). Only this morning you wake up to see this in your morning paper:

NEW YORK (Reuters) - Coca-Cola Co. (NYSE:KO - news), the world's No. 1 soft drink company, on Wednesday said it will launch a coffee-infused soft drink called Coca-Cola Blak in various markets around the world in 2006.

The news of the launch came hours before Coke Chief Executive Neville Isdell was scheduled to address financial analysts and investors in New York.

"Blak"?

That's not much different than "blech". It's kind of the sound that I imagine one makes when one is about to throw up, as in, "Hmm, I don't feel so good . . BLAK! . . . Oh, man . . . BLAK . . . Oh, God, this toilet bowl disgusts me . . . BLAK!"

This is the problem with guessing about what management will do when the going gets rough at their companies. Any normal person would look at the idea of a coffee-flavored cola as just this side of insane. Literally- I think that's one of the tests they teach these days in schools of psychiatry. "When in doubt about a patient, pitch the idea of Coca-Cola Blak- if they smile and nod you know they're a danger to themselves."

Yet in a corporation this big, not just one person, but several layers of managers THOUGHT THIS WAS A GOOD IDEA. That tells you all you need to know about the management at Coke. Yet who would have guessed just how unhinged management at Coke had become before it evidenced itself this way? You really never know until it's too late, as far as I can tell.

That's why for me it's index funds all the way....