As the editor of the Quibbler, Xeno publishes his wild stories, which most people discount immediately as a rule because they are coming from the unreliable paper. Of course, the Quibbler does report some true stories, as I've mentioned in my Quibbler post, including the articles about Voldemort's return. He also was right in believing that the Deathly Hallows existed, which most people thought was ridiculous, including Hermione:
"Mr. Lovegood, how can you possibly believe -?"
"Luna has told me all about you, young lady," said Xenophilius. "You are, I gather, not unintelligent, but painfully limited. Narrow. Close-minded" (The Deathly Hallows, 410).
It's not only the magazine that has the reputation of being a little off, it's also the man behind the writing. Harry described him as "a most eccentric looking wizard. Slightly cross-eyed, with shoulder-length white hair the texture of candyfloss, he wore a cap whose tassel dangled in front of his nose and robes of an eye-watering shade of egg-yolk yellow" (The Deathly Hallows, 139).
Xeno may be eccentric and a little too anxious to believe any myth, but his daughter Luna is his priority, and that perhaps makes him more sane than we give him credit for. Their bond is undeniable as she defends Quibbler and spreads his theories. Luna was so proud of her father's paper because he didn't pay to have articles written and he didn't care about the money. All he wanted was to share the things he thought the world needed to know.