Editor's Note: This piece is a combination of published entries that appeared earlier today in Doug Kass' "Daily Diary" on Real Money Pro.
When a trade like Monitise fails, I try to learn from the experience.
It is easy to say, "The charts told us so." In this case, however, a very knowledgeable investor, Omega Advisors, as well as some large corporations -- MasterCard (MA), Telefonica (TEF) and Banco Santander (SAN) -- made sizeable investments in the company. These investors and partners have vast research capabilities and performed extensive due diligence prior to making a commitment to either infuse capital or build a corporate alliance and partnership with Monitise. Nearly everyone who looked under the hood moved ahead with an investment and/or a partnership.
Not one of them has been rewarded, and all have suffered large financial losses.
Monitise was a speculative investment in the rapidly changing, disruptive and competitive business of mobile payments and mobile banking. The risks of technological change and the emergence of new entrants and product acceptance are high, and so were the potential rewards if the company became an important player in the industry.
Thus far, that has not been the case, and I have lost total confidence (as have others) in the management.
One lesson is that speculative stocks must be weighed relative to one's risk profile given the rapid pace of technological change. Monitise is a constant reminder of this.
It is a far worse a feeling to know that some subscribers have lost money than it is losing money personally.