 |
Is bad news good news? Closing the GapBy Rick Horowitz
Phase One was easy. In Phase One, I ignored Wall Street, and Wall Street ignored me right back. I didn't invest in the stock market, didn't dawdle over the Dow, didn't even read the business pages of the newspapers. I'd say that I didn't own a single share of stock during Phase One, except that I did. Own a single share of stock, that is; it was a birthday present from my Uncle Joe. When it split a few years later, I owned two shares of stock. When the company eventually became a different company (I think the technical term is "swallowed"), my two shares became one share again. It almost became no shares; they kept sending me invitations, which became warnings, which became deadlines, to trade in my shares of the old company for a share of the new company. Finally, at the last possible moment, I bestirred myself and filled out the necessary forms, which is how I became a proud investor in...something or other, and the equally excited recipient of a quarterly dividend of forty-five cents. Phase One lasted decades. Phase Two was shorter, and harder. In Phase Two, watching Wall Street became the national pastime -- and not just watching. Diving in. Hopping on the bandwagon. Riding the rocket. (Insert your own metaphor here.) Somebody somewhere had lit the fuse, and the numbers weren't climbing gradually anymore; they were going totally crazy. (I think the technical term is "going totally crazy.") TV was filled with investment advice and investment ads and investment mega-champs. Spotting the hot stock, and then the even hotter one, was all anybody wanted to do. Almost anybody. My Phase Two investment strategy, as it happens, was very much like my Phase One investment strategy: none. I figured I had better ways to spend my money. Food. Fuel. Movies. CDs. (The music kind, not the interest-earning kind.) My retirement plans could be summed up in three little words: Hit the lottery. And I would have been perfectly satisfied with that approach, except for being surrounded, bombarded, by Wall Street success stories -- the entire population, or so it seemed, boasting about their bulging portfolios, smug about their latest killing. I'm not a jealous guy, but from time to time I did get the gnawing feeling that the gap had become a canyon, and that the canyon was getting larger every day. I had only myself to blame, of course, for missing out on all those opportunities, all those enormous rewards that sharper, quicker, bolder people had snapped up. But knowing it didn't make me feel even a tiny bit better. That's what Phase Three is doing. Making me feel a tiny bit better, I mean. In Phase Three, the bandwagon has broken an axle. The rocket is falling out of the sky -- and so is the sky. Some of those dot-coms turn out to be more like dot-cons, while some of the biggest firms' biggest numbers are -- how should I put this? -- phony. So now the big story is how all these people, all these happy investors who'd thought they were set for life, aren't quite so set after all. Their nest eggs are being scrambled, and they're going to have to scramble a little themselves to cope with this unexpected turn of events. While I -- who was never up all that high in the first place, and didn't have far to fall -- find myself enjoying the thought that I was four billion dollars more profitable last year than Company X, that if everything breaks right this year, I could be ten billion dollars more profitable than Company Y. While I -- who doesn't have an envious bone in his body -- find myself less than distressed at the thought of the canyon shrinking. Not that I'd ever wish hard times on anyone. Although there are a few people... Posted
7/23/02. Profit from Rick's award-winning commentary twice every week.
(He's always a smart investment!)
|
  |
Rick Horowitz
