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>>Barbra Streisand's Latest
Role: Stock Picker
"eBay and Amazon dropped like
20 points each. I said, 'I don't
think I can do this.' "
Jeanne Lee
So Barbra Streisand was talking with her
good friend Donna Karan on the phone last
fall, and she told Karan she'd made
$130,000 on eBay stock in just one month.
Karan was duly impressed. As Streisand
tells it, "She said, 'Oh, can you do that for
me? I'll give you a million dollars to invest
for me.' And I said, 'You're crazy, why
would you do that?' She said, 'Well, it
sounds like you're making so much money,
so do it for me.' So I said, 'I'll do it if you're
willing to lose it. Are you willing to lose a
million dollars? That's the only way I'm
willing to do this.' "
At the outset it looked as if the famed
designer would indeed take a big loss. "The
first day I bought eBay and Amazon, and
they dropped like 20 points each, at least,"
Streisand recalled recently in an exclusive
interview with FORTUNE. "I couldn't even
call her, because I was heartsick. I was
having heart palpitations.... So I waited till
the stock went back up, when I could call
her again, and then I said, 'I don't think I
can do this' ... yet I was fascinated to try."
The result was stunning: After five months
of intense trading, Streisand managed to
nearly double her friend's stake, to $1.8
million.
Never mind gold records. Who cares about
Academy Awards? Investing--especially in
volatile tech stocks--has recently become
a consuming hobby for the star of Yentl,
Funny Girl, and The Way We Were. She
studies business publications like Barron's
and watches CNBC religiously. She has
installed a real-time stock-quote service at
home. And she wakes up at 6:30 every
morning to catch the opening of the East
Coast stock markets. ("It's terrible! I have a
natural-born alarm clock that goes off
every morning at, like, 6:30. I want to
sleep, but I just wake up.")
Where does the singer-actress-director get
her financial ideas? The same places as any
investor--from friends, relatives, and daily
life. "We go to Starbucks every day, so I
buy Starbucks stock," she explains.
(Streisand also gave some Starbucks shares
to her longtime housekeeper recently as a
birthday gift.) Another pick is Time Warner
(the parent company of this magazine),
which Streisand has held since 1992.
One day last summer she and her new
husband, actor James Brolin, were cruising
off the coast of Greece when Brolin started
talking about America Online. Streisand got
so excited about the stock that she
immediately phoned her broker--from the
boat--with a "buy" order. The stock was
then $31. Since that call it has quadrupled.
Overall result, as of mid-May: "I'm up 89%
today on my account since Aug. 31!"
Not that Streisand is about to drop her day
job for a career in money management. "I'm
making an album [now]," she explains, "but
I can make an album at the same time as I
can trade stocks." Then, like a good finance
professional, she corrects herself: "But it's
not necessarily trade. I like quality
companies." So while she picks Net stocks
for fun, the bulk of Streisand's wealth--she
won't reveal how much that comes to--is in
the more risk-averse, professional hands of
her friend and money manager, Todd
Morgan, chairman of Bel Air Investment
Advisors (see How Todd Morgan Manages
the Rest of Barbra Streisand's Millions: Very
Conservatively).
Until early last year Streisand was "very
passive," in Morgan's words, leaving all the
decisions to him. What changed? During the
winter Streisand heard a doctor friend
discussing Pfizer's new impotence wonder
drug, Viagra. She thought it sounded
brilliant, so in March 1998 she bought some
shares (she won't say how many) of Pfizer
at $89. Shortly thereafter, she says,
Barbara Walters discussed the drug on
television, and the stock shot up to $120.
Streisand was hooked.
"I don't pretend to be some maven, like the
guy in Barron's last week who can analyze
all the companies and so forth," Streisand
demurs. Maybe not, but she can hold her
own with the pros. This past February,
when Streisand dropped by for lunch,
Morgan hooked up a 45-minute phone call
with famed Internet analyst Mary Meeker of
Morgan Stanley Dean Witter. (It's hard to
say which star was more thrilled.)
Streisand understands a thing or two about
diversification too. Putting most of her
money with Todd Morgan gives her a
cushion against risk, she says, "because on
the days that I lose money on highflying
stuff, I'm so thrilled that he has his feet on
the ground with quality companies. He's the
rock of my Gibraltar. He's such a good
friend, and a caring human being." Morgan's
take: "Barbra is a great trader. She's got a
terrific, terrific instinct, and she's got the
courage to act on it."
For all her dabblings in risky territory,
Streisand admits that the volatility makes
her nervous. "Last week I hated it," she
confesses. "I can't stand to see red in my
profit-or-loss column. I'm Taurus the bull,
so I react to red. If I see red, I sell my
stocks quickly."
And she stopped handling outside money
after she decided that the heart
palpitations and anxiety were putting too
much strain on her friendship with
Karan--who had designed Streisand's
wedding dress for her marriage to Brolin and
whom Streisand describes as "like my
sister." (What about those profits from
eBay and Amazon? The two friends decided
to spend the earnings on cruises.)
Who knew the Funny Girl could be such a
Money Girl? << |
