Here's a fun article:
Barber's Tech-Stock Chit-Chat
Enriches Many Cape Cod Locals
By SUSAN PULLIAM
Staff Reporter of THE WALL STREET JOURNAL
DENNIS, Mass. -- "You making money, Billy?" William Allen asks as he
saunters into Bill's Barber Shop around 1:30 one quiet midweek, midwinter
afternoon.
William Flynn, who is busy clipping a customer's hair, indeed is making
money. Lots of it. But Mr. Allen isn't talking about the $10 that Mr. Flynn
pockets for a haircut. He's talking about the barber's technology-laden
portfolio of stocks.
"Would you look at Abgenix?" says Mr. Flynn,
trimming a customer's eyebrows and glancing at the
television tuned to CNBC business news. Abgenix, a
biotechnology company, is rising (and will end the day
up 8.5%). Ditto for Vasogen, a Canadian biotech (up
14.7% on the day), Tricon Global, a restaurant
franchiser (3.7%), and Infinium Software, a
business-software company (3.5%).
"Market's having a nice run today," Mr. Flynn notes.
Neither sports, nor politics -- even in this election year
-- are the topics of choice at Bill's Barber Shop. Just
about any time of day, stocks are the subject -- where they're going, which
are hot and which are not, and of course, how much their owners have
profited from them. And not just any stocks, but in particular, tech stocks.
The scene in Bill's Barber Shop, repeated in countless locales across the
nation -- different settings, different characters, but all caught up in the
highflying drama of the tech sector -- helps explain why the Nasdaq
Composite Index powered past the 5000 mark last week -- little more than
two months after it first topped 4000.
"I'm thinking about buying a Janus fund," says Mr. Allen, the retired owner of
a small power-equipment company, as he sinks into a chair, joining the others
who wander in to pass an hour or so, as they do many days, whether or not
they need a haircut.
Larry Street, a local bookkeeper, stops by for a trim. He's bought Coyote
Technology, a telecommunications company. "I'm hoping for a split," he says.
Joe O'Keefe, who makes his living painting and wallpapering for affluent
summer residents, doesn't need a haircut. He wants to talk up Network
Appliance, a data-storage company. "It's just like EMC, only smaller," he
says. EMC, a Hopkinton, Mass., data-storage company, is one of the group's
favorites, thanks to Mr. Flynn's recommendation.
'If You Miss This One ...'
Most of the people who gather at Bill's hold jobs in the old economy, but
none are buying blue-chip industrial stocks. "You get three or four times in
your life to make serious bucks," says Ron Danforth, owner of a local
direct-mail business and a regular at Bill's Barber Shop. "If you miss this one,
you're crazy."
The conviction that the party is far from over is part of the reason why,
despite experts' constant warnings about a speculative bubble, technology
stocks soar ever higher. "I don't think anything could shake my confidence in
this market," Mr. Allen says. Mr. O'Keefe adds: "Even if we do go down
30%, we'll just come right back."
Not long ago, few of these people had any interest in the stock market. "I
grew up in a working-class neighborhood in Boston," Mr. O'Keefe says. "I
always thought stocks were for rich people."
It's the off-season, when the tourist shops
downtown in this Cape Cod vacation spot are
empty and most of the beach homes are shuttered
for the season. Many of those who remain
year-round are retirees and owners of small
businesses that cater to the summer crowds. They
have plenty of time on their hands to stop at Mr.
Flynn's cedar-shingle shop, where an American
flag snaps sharply outside the window on this
bright afternoon.
Many of the men credit the 60-year-old Mr.
Flynn for introducing them to technology stocks.
He has been cutting hair here for 30 years; for the
past 20 of those years, he has been buying stocks
and mutual funds. His interest in the market comes
partly from his great-grandfather, who was a
barber in Framingham, Mass. "He used to tell me
to put 10% aside each month and put it into the
stock market," he says.
In the 1987 crash, Mr. Flynn's $50,000
investment in the stock market was wiped out. "I bought $16,000 worth of
Coleco Toys on margin and invested another $10,000 in a small U.K.
concern," he says. "My wife told me at the time she wished I hadn't done
that."
After Coleco's shares collapsed, he got a margin call he couldn't meet. "I
didn't really understand at the time how margin worked," he says.
Undeterred, he soon began investing savings from his business, along with
what his wife, Jean, could set aside from her salary as a secretary at a small
insurer.
Since 1991, Mr. Flynn, a portly man with a handlebar mustache, has invested
$100,000 in stocks and watched it grow to $600,000. His picks read like a
caption history of the technology-driven bull market: America Online, Yahoo!,
Amazon.com and the like, plus an assortment of smaller biotechnology and
penny stocks.
He does some trading online through Datek, but he handles most of it through
his broker at Dean Witter in Boston. His picks come to him the populist way:
word of mouth. He first bought EMC on the recommendation of another
barber in a nearby town. He picked up Abgenix on the advice of Mr.
Danforth, the owner of the direct-mail business. Infinium was the inspiration of
Michael MacDonald, owner of a local restaurant.
Lately, EMC is the star of his portfolio. He first bought the stock, in 1995, at
around $6.75, on a split-adjusted basis, and it has soared to $130 after two
splits. Now, EMC accounts for about half his portfolio, and he still thinks the
price will triple in the next three years. Then, he figures, his portfolio will be
worth enough to let him retire and live comfortably on interest income.
"Somebody else can cut hair then," he says.
Until then, he plans to continue collecting and dispensing his brand of market
wisdom on the barber-shop floor. "I'd say I've put 100 people into EMC," he
says as he administers a buzz cut to a teenager.
Rick Smithson, owner of the gas station down the street, bought EMC shares
on Mr. Flynn's advice. At the Chinese restaurant nearby, the waiter owns
EMC, too. Rick Capobianco, the Maytag dealer in town, bought some shares
a few weeks ago after months of cajoling by Mr. Flynn.
"That guy?" Mr. Flynn sighs, pointing to a customer in the parking lot who has
just left his shop. "He had $5,000 set aside two years ago, and I told him to
buy EMC. Would've been worth $18,000 right now if he'd have listened."
Mark Mercurio, a Vietnam veteran who now runs a residential lawn-sprinkler
business, says he bought his first stock -- EMC -- last May after Mr. Flynn
convinced him he could make in a matter of weeks what it would take him all
year to earn on a $10,000 certificate of deposit he and his wife had bought. "I
never gave the stock market a thought," Mr. Mercurio says. "Didn't know
anyone who did." After a stock split, his initial investment of $4,700 has
nearly tripled in value.
Mrs. Flynn, whose office is two doors down from Bill's, stops by for lunch.
Heating up a bowl of noodles while Mr. Flynn pulls a sandwich from a brown
bag, she concedes that her husband's big bets on technology make her queasy
sometimes. "I'm a little nervous," she says. "I try not to pay too much attention
to it."
Since the end of January, the value of Mr. Flynn's holdings has swung
$100,000 in either direction -- first down, and more recently, up. Part of the
decline at the end of January was the result of a plunge in Qualcomm, which
Mr. Flynn bought near its peak on a day when it split its shares.
"It's hard to stay bullish when you're down $100,000," he says. "I was a little
nervous. I had trouble sleeping that night thinking about it." He vowed to hold
his 500 Qualcomm shares, which he bought at about $170 each, until they hit
$270, but he sold them a week ago at a total loss of about $8,600. He put
the remainder in Abgenix.
Overall, though, he's obviously more bull than bear. "There was that bad
stretch a little while back," he says. "Guys called me up and said, 'What do I
do?' I told them, 'Buy more.' " And should EMC take a big tumble, he says,
"sure I'd feel bad, but I have a strong conviction it won't."
Indeed, Bill's Barber Shop has little use for the faint of heart. Mr.
Capobianco, the local Maytag dealer, says he's "terrified of technology.
EMC's a strong company, but who's to say some company won't come
around with a better deal?"
"You want a guarantee?" Mr. Flynn shoots back. "Go buy a muffler."
Write to Susan Pulliam at susan.pulliam@wsj.com |
