If you want a case study in irrational behaviour you cannot find a better example than the Australian company now known as 900 Degrees Limited.

In a previous life they were known as General Publishers Limited, and their New Zealand operation as Percival Publishing Limited, and they were my main competitor in the publishing business until about 10 years ago.

They published a range of magazines of varying quality, and both the NZ and Australian operations all had one major thing in common...namely that all the magazines lost money.

It was 12 years ago today, 26th September 1995, I was talking with the then CEO when he was visiting NZ...(my office was across the street from theirs and he popped in for a cup of tea)..and suggested he undertake major restructuring, simply stop publishing anything which does not make a profit, launch some new titles which would be of interest to readers and potential advertisers, subcontract out a myriad of services, sack unproductive employees and close various offices to turn things around and save his company.

He thanked me for my suggestions but took the optimistic view that 'something would turn up'.

Well...something did not turn up, losses multiplied and multiplied, causing this chap to be sacked and replaced by his Brother.

I had lunch about a year and a half ago with his brother in Wellington, where I named half a dozen of their titles and said all of them should be ejected to save his company, but he was also possessed with irrational belief in 'something turning up', despite there being no basis for that view.

During the last 12 months or so, the end of the road was reached.

New management and Directors have been obtained, most of their magazines have ceased and some new titles launched, most of the staff have been sacked, offices closed and even a change of the company name has taken place.

As usual I can say "You heard it here first, folks"

However, the future for the company actually looks rosey...they are forecasting to break even in the current financial year (which has a certain novelty about it) ..and I wish them all the best.
If you wanted an investment of a very speculative nature (which I strongly advise against) they are listed on the ASX with the code of NHD.

Why do people engage in this wishful thinking? and instead of taking action, however painful, simply believe 'something will turn up'

List your own examples...