Hi all
Got a kick out of this article- by Bernard Mccormick(and if i was not such a computer dummy I would learn to use my scanner so I would not have to hand type the whole article:)
The only subject anybody cares about these days is making money in the stock market. People who know nothing about investing have made huge amounts of money during the last few years. A very close relative of your correspondent started with $25 at the beginning of 1999. Convinced that the opportunity for profit in the Internet Age was unprecedented in our times she devoted all her waking hours to studying the market. She was up in the middle of the night watching financial news from European market, and she never missed CNN's morning financial show.
She read hundreds of financial publications, and she attended seminars and joined the National Association of Investment Nuts.
"This has never happened before and will probably never happen again," she confided. "It is the greatest thing since the invention of the steam engine. It's the Industrial Revolution all over. Have you ever seen anything like it?"
"Yes," I said, "Jane Russell in Forever Amber. Also duct tape, and WD-40. Those are the two leading inventions of the 20th century."
She wasn't listening. She was watching Paul Kangas, Louis Rukeyser and Meg Green, and reading the Wall Street Journal and Money Magazine, all at once. Anyway, I warned her not to spend all $25 at once, that the key to sound investment was a diversified porfolio. I told her if she were playing around with retirement money, she should forego quick gains in go-go stocks in favor of security,Confederated bonds-that sort of traditional investment. Capital preservation is the goal of prudent money managers but she went all the way and bought two shares of Ratscape, which opened at 12 went to 200 in three minutes. She sold Ratscape and put the profit immediately int Sexcom, which split four times in 72 hours and then merged with Dot.com, which paid $450 a share, or 200 times earnings when it merged with Turkey.com At the end of the first week of 1999 she had $46,000 from her original $25.
"That's not bad," I said. "Michael Swerdlow would be happy with that."
She was pleased until she heard that her girlfriend Brenda ha started with 3$ and turned it into $65,000 during the same week. You recall that was a hot week for stocks generally.
"Now you should save that money," I advised. "What goes up must come down. It's a law of physics. Buy gold, or put it in the money market, and then buy on the correction."
She immediately took all $46,000 and put it in Numbner, which doubled in two days, and she sold to buy Comdot, which went from 18 to 94 by the end of the week. She sold and took a position in Postionnet,which split 30 seconds later and doubled again when she bought Doublenet in 10 days. By this time she had a stake of $348,000 on her original $25.
The next day the market lost 1,370 points, and I suggested she sell before it was too late. "Bullnet!" she said. "What?" I queried. "I just bought Bullnet.com," she said. Well, you all read about that IPO- opened at six and went to 96 in an hour, by which time she was out and into Dipnet Industries, a story in itself. It was now March, and she had $4,750,000 but against my advice, she remained fully invested.She bought HiBuddy and Amerika Lang Syne and Dumb.com and Nit.pik and Tootech Industrics and Michael Soft, and by July their combined market worth exceeded $22million. "You have done pretty well," I told her in August. "Not many people turn $25 into $22million in six months. If I were you , I'd go to the sidelines, build cash reserve for the downturn. Buy collectibles, Fake Monets, first editions, Lionel trains, something like that."
She was watching the financial news, taking notes, not listening. Alan Greenspan had just reported that he had lost the interest rate. He'd taken it out to show it to some visiting Japenese economists and didn't knnow what the hell he did with it. Worse still, he couldn't remember whether he had just raised or lowered it. The markets were panicking. The Dow had dropped 3,000 points, but my relative calmly bought Schleppertech and Calamity Ltd.com, and their success is history. She was out of both stocks in a month but by then she had earned more than $200 million, thanks to the merger with Time-Warp.
And so the year passed, and despite my concerns, she continued to reinvest as rapidly as she doubled her money. By the end of the year, she had purchased a big six acounting firm to keep track of her money. Nobody was sure, but estimates of her net worth were $6 trillion. On the final day the year, she bought Taxshelterhit.com, and it doubled before the stroke of midnight.
One of her recently hired high paid advisors said she needed a real estate shelter, so she bought New Zealand.
"I think you should stand pat now," I told her last week. "The market will turn and there will be a shakeout and plenty of chances to buy at a discount, and you never know when the bottom will fall out, and you will lose it all." She motioned to me to shush and took Bill Gates'call.
In all, even I admit, not a bad year for an amateur. But she is in a snit that Brenda is still ahead of her. |
