Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : IDTI - an IC Play on Growth Markets -- Ignore unavailable to you. Want to Upgrade?

To: Samuel R Orr who wrote (9648)	9/27/1998 9:37:00 PM
From: David Tesorero	Read Replies (3) \| Respond to of 11555

Hello Sam, The recent problem with Long Term Capital is very interesting. It reminded me of the concept 'group think'. It is hard to believe that 3 of the worlds most regarded financial minds could be so recklessly margined. I bet you a Big Mac and Pepsi, that on an individual basis none of those fine minds would have been so reckless. I believe that the greed and easy money of the last 3 years is in most investors 'cache memory' and is going to hurt a lot of people. Complete faith that the market only goes in one direction is a very scarry thing. You can almost bet your last dollar that when the market falls hard (I mean real hard) the guy who can least afford to lose money will be selling (at the bottom) to the guy who understands that markets only go up 10% per year. Being in the real estate business, I have come across MANY people who say 'I have $25,000 to put down on a house, but I think I'll only put down $5,000 and put the rest in the market' ...I worry about this kind of thinking. If 3 of the greatest minds on Wall Street are 90% leveraged, how many new investors or old experienced investors for that matter are 50% margined believing that the market only goes one way. For the record I do believe the market only goes one way, but at about 10% per year over time. Old Mr. Market has a way of teaching very painful lessons to those who least expect it. I can live for the next 100 years and never touch the money I have in the market...But that guy who just bought a house for 200K and put down 5K and invested the rest...what about him???? On a more upbeat note...I just finished reading 'Green Eggs and Ham' with Matthew, my 3 year old son. Did I tell you that my wife and I are expecting the birth of a little girl in November??? Now I can tell you for sure, that's worth about million bucks... Dave