| Agreed - investors were sold the LTBH bill of goods, in most cases by entirely well-meaning salespeople, I believe. Unfortunately, the raging bull market, combined with good ol' American optimism and an ongoing IT revolution, encouraged millions of new investors to try to have their cakes and eat them, too. They wanted to be LTBH investors and they also wanted to be successful bigtime speculators at the same time. LTBH dogma held that equities, generally, produced higher returns over the long run than any other vehicle, and I think that a lot of people thought or hoped that buying a supposed tech blue-chip like JDSU or SUNW or WCOM or LU or MSFT or CSCO meant that, at worst, they'd earn the LTBH return over the long run, but that, at best, they'd be wealthier than they had ever before imagined and without hardly working for it. Suddenly, some of the most hopeful promises they'd been told as children but had been forced by experience to forget - about the country, about technology, about the future - seemed to be coming true, in their lifetimes. As their monthly statements came in and, month after month, made them feel like game show winners who didn't even have to answer difficult questions or wear funny costumes, people who didn't even understand how margin worked were going out on the margin limb the whole way. They celebrated stock splits as though having their quantity of shares doubled also caused their holdings to double. When reality hit, and hit, and hit, they were as shocked, hurt, disoriented, and stubbornly loyal as a teenager facing the break-up of his or her first love affair, and the stock market fell a lot faster than most could work through all the stages of grief, anger, denial, and acceptance. I think many who experienced losses felt at some level, at multiple levels, that they deserved the punishment they were going through, and, the more pain they felt, the more punishment they deserved. In the meantime, their rational, but equity-inexperienced, minds refused to believe that a stock that had gone from $200 to $100, had that much further to fall, and, having held from $200 to $100, then to $50, then to $20, then to $10, there certainly couldn't be that much further to go. The presence, just short of ubiquitousness, of voices in the media proclaiming that the upturn, or at least the stabilization, was just around the corner - or, amidst whatever latest rally, was already under way - encouraged them further. Even the dawning sense that there was nothing they could depend on contributed to their decisions to hold on: If, indeed, the whole thing was unpredictable, and so many people were so wrong about so many things on the way up and on the way down, then how could anyone know for sure that JDSU or SUNW or WCOM or LU or MSFT or CSCO wouldn't rise up again? Even moments of despair simply left them paralyzed, and unlikely, unless forced by events, to transfer their remnant holdings to more secure or higher-yielding alternative investments. I'm sure that by now, those investors who still have a few hundred or maybe even only twenty or ten shares of RBAK or INKT or CMGI in their portfolios laugh a little bit when they notice them, think back to the "golden moments" in the same way they do when, to go back to a previous metaphor, they view the pages of a High School yearbook - and, by now fully accustomed to viewing their lives as something other than a lottery commercial, they might even tell themselves that "it's better this way" - to have to work for a living, to value every dollar and to value their lives and friends more. |
