TexasDude's bio portfolio is doing well in a difficult market, still, it seems we may have been following the wrong stock picker.
The Stock Market Has Made Inmate 90T1282 a Rich Man
Feb. 6 2001
nytimes.com
By TINA KELLEY
LMIRA, N.Y. — On his tax
returns, Michael Mathie
writes "investor" in the blank
reserved for occupation. He claims
to have traded upward of $8
million in securities since 1998. In
1999 his adjusted gross income
was $899,969, all but a sliver in
capital gains. He has also invested
in a house for his family on Long
Island and bought four cars,
including a $97,000 Dodge Viper.
Plus a garage to keep it in.
But here at the Elmira Correctional
Facility, a maximum security prison
where the guards call him "our
resident millionaire," Mr. Mathie is
formally known as Inmate
90T1282, who has completed
almost 12 years of a 10- to
30-year sentence for
manslaughter. He is also known
for advising and helping pay for
other inmates' legal efforts, as well
as providing free legal advice to his
fellow prisoners and stock tips to
anyone who asks. Given his
successes on Wall Street, people
listen.
"It runs the whole gamut, from
lawyers to inmates to everybody," he said in a recent interview.
Inmates cannot run their own business from prison, but as a state prison
official said, they do not give up their right to free speech. Mr. Mathie's
investing is not considered a business since he does not actually conduct
the transactions. His father does, making this one of the odder tales of
America's infatuation with the stock market.
Mr. Mathie, 33, has no Internet connection, no cell phone, not even a
phone in his cell. He makes his trades by calling his father collect from a
pay telephone — up to 10 times a day when the market was more
vigorous. His father then places trades on the Internet.
"I could be paying a mortgage with what I pay MCI," he said, adding that
he pays his father $500 to $1,200 a month for the calls.
He remembers investing in China Prosperity International Holdings, now
China Converge, a foreign company that trades on Nasdaq, when
China's proposed membership in the World Trade Organization was a
hot topic.
"It went from $1 to $10, and the next day it was $18, so I threw
$50,000 at it, and called back at 10:30 or 11, and it was at $70," he
said. "So I cleared $150,000 and got my $50,000 back in two and a half
hours."
He has also taken his lumps, mostly in paper losses, when tech stocks
tanked. He gets chills when he recalls the market plunge of August 1998,
when he lost $750,000 in market value in 20 minutes.
But he remains a true-believing bull, and predicts that the Nasdaq will top
6,500 by the end of 2002, up from its current 2,643.
"Definitely, we're not headed for no recession, and if we do go into a
recession, it's because of the media," he said. "It's a self-fulfilling
prophecy."
Mr. Mathie, a slight man who looks more like a clerk than a killer, was
well acquainted with risk — but not the financial kind — when he landed
in jail in 1989. He was 21, a high school dropout and former cocaine
addict. He and three others were arrested in the murder of Paul Vincent
Lamariana, 49, who was hit in the head with a tire iron, choked with an
electrical cord, tied up, stuffed in plastic bags, wrapped in all-weather
carpet, and dumped on the side of the road in Oak Beach, Suffolk
County. Mr. Mathie admitted that he hit him with the tire iron and choked
him.
Mr. Mathie said that he felt remorseful about the killing, and that the
group of four friends believed that Mr. Lamariana was abusing the
daughter of one of them. He has made inquiries about how he could help
Mr. Lamariana's family.
"I just wish there was something else I could do other than time," Mr.
Mathie said. "I have done a lot of self-improvement, made with Paul in
mind. That's basically what drives me."
Contacted in California, Mr. Lamariana's mother declined to speak to a
reporter.
Mr. Mathie pleaded guilty to manslaughter and conspiracy, but said he
did so to get out of Suffolk County jail, where he said he was raped and
repeatedly sexually abused by the chief of internal security, Roy Fries.
In 1996 Mr. Mathie won a $750,000 settlement in a federal civil suit,
where the judge who tried the case ruled that the evidence was
"overwhelming" and called Mr. Fries's acts "an outrageous abuse of
power and authority." No criminal charges were filed in the case because
the Suffolk County district attorney's office said there was insufficient
evidence to prosecute it. (Mr. Fries is retired and did not return two
phone messages left at his home in Lindenhurst.)
After an appeal, Mr. Mathie's award was later reduced to about
$500,000. With $75,000 of that, he began trading stocks.
Jim Flateau, spokesman for the state's Department of Correctional
Services, said inmates were not allowed to have computers or to run
businesses from prisons.
"Certainly, since the transaction is occurring outside prison, it's not
something over which we would exercise any control," he said. "Inmates
have a First Amendment right to discuss whatever they want on the
phone," so long as it is legal.
Such behind-bars business is very unusual, said Robert Gangi, executive
director of the Correctional Association of New York, a nonprofit policy
analysis group.
"Most inmates are poor people, and most inmates wouldn't know a stock
exchange from a soccer ball," he said.
Under the "Son of Sam" law, prisoners are not allowed to profit
financially from their crimes. An unsuccessful bill proposed by Gov.
George E. Pataki in 2000 would have revised the law to allow crime
victims to sue convicts for money and property from any source. That bill
will be proposed again this year, said Caroline Quartararo, a
spokeswoman for the state's Crime Victims Board.
In the meantime Mr. Mathie continues his daily routine, turning on the
television in his cell at 4 a.m. to watch news of the European markets on
ABC and PBS; there is no cable for convicts. He receives about a dozen
publications that help him make his investment decisions, including The
Wall Street Journal, Barron's, Investor's Business Daily, Value Line
Investment Survey, and Individual Investor. The correction officers who
deliver his mail complain that he gets too much.
"I compensate them," Mr. Mathie said. "They want to know what stock
tips to go on, for their retirement portfolios and so forth."
He favors a diversified approach. Some of his favorite stocks? Corning,
which he expects to double in price, Juniper Networks, JDS Uniphase,
and AT&T, which is planning to split into four divisions.
"You can't beat that with a stick," he said. "It's a good long-term hold."
Tech stocks have been kind to him, and he said he considered their
recent turn downward to be "a fabulous buying opportunity." He is
particularly fond of Yahoo.
"Yahoo paid for the Viper," he said, referring to his new 450 horsepower
convertible. "I had a picture of one on my wall for three years. I got |
