The Five Dumbest Things on Wall Street This Week
By George Mannes
Senior Writer
08/29/2003 07:03 AM EDT
Marv, the curmudgeonly chairman emeritus of the Five Dumbest Things Research Lab, overflows with good advice about dodging bad investments.
Stay away from tech companies based in Fort Lauderdale, warns Marv. Avoid stocks with cutesy ticker symbols. And never, ever invest in a company with a product demonstration that makes you say, "Cool!"
Yes, as Marv constantly reminds us, the road to poverty is paved with awesome demos.
"A machine that lets you rewind TV shows and skip commercials? Cool!" That's the kind of reaction that gets you buying TiVo (TIVO:Nasdaq - commentary - research) for $70 a share. (It's now around $10.) Cool demos are exactly what caused people to lose millions in palm-sized computer manufacturer Handspring (HAND:Nasdaq - commentary - research) (once above $100 a share, now trading for a buck), interactive TV pioneer ACTV (IATV:Nasdaq - commentary - research) (peaked at around $50, acquired for $1.10) and countless other tech companies.
Products that make you go "Wow!" come from stocks that make you go "Ow!" says Marv. It's not fair. But it's just how it is.
Which brings us to American Technology Corp. (ATCO:Nasdaq - commentary - research). We haven't experienced a demo of ATC's flagship product firsthand, but apparently it's a doozy. See, ATC makes a speaker system that directs sounds in a beam as precise as the light emitted by a laser.
Cool stuff. As USA Today reported in a big story about ATC in May, the potential applications of the company's HyperSonic Sound are mind-boggling. Imagine an in-car HSS system that could play one CD for Mom and Dad up front and a different one for the kids in back. Imagine in-store audio advertisements for Duracell heard only by whoever is standing in front of the battery display. "Rarely is an invention so unique, so visceral and so simple that in 15 seconds most people who experience it realize it could alter everyday life," wrote USA Today's Kevin Maney.
Which gets us to the part about loving the product but hating the stock.
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