BUYING STOCKS
FOR DUMMIES

     I was on the phone with my very dear friend. "Any interest in having the most expensive lunch of your life?" I asked.
    "I thought the lunch we had a couple of months ago was the most expensive," he replied. "How do you expect to top that."
    "Never underestimate my ability to make horrendous stock market picks," I said. "You'll be horrified to know that I have another hunch."
    I could sense his panic right through the phone line. But he agreed to have lunch with me, anyway, probably because of morbid curiosity. And, of course, because of the very slim chance I might actually be on to something.
    The law of averages was certainly on my side. Sooner or later I'd be bound to pick a winner. Theoretically.
    Our most expensive lunch up to this point was actually about six months ago. A stock that we had both bought at $50 was down to $32. This was an excellent, well-established company, and I happened to know the second-in command. He was a good guy, and a lot of fun at parties.
    That seemed reason enough to double-down at $32. There was no way the stock would drop any lower. My friend was far too smart, and far too much fun. He would never let it happen.
    So as we munched down our entrees, I concluded that the stock had reached its bottom, and we should both snatch it up in a brilliant display of stock trading.
    It's now down to 30 cents, and the company just declared bankruptcy.
   While that was our most expensive lunch ever, a few others have come close. I'm the poster boy for the adage that you should never invest in individual stocks, at least not without professional help.
   But that doesn't stop me. The good news is that I don't have very many hunches, so my stock trading is pretty minimal. The bad news is I usually act on the few hunches that I do have.
    And, of course, I'm always wrong. I can't remember the last time one of my hunches actually made any money. From satellite phones to Bank of America, I always lose. If I have a hunch to buy a particular stock, that company might as well close their doors and sell their office furniture. They're as good as done.
    There should be some way I could make some money from my incompetence. I should probably start a newsletter where I announce my latest hunch of a company which I expect to skyrocket. Then all my followers could "short" the stock (bet against it) and make a fortune. I'd be rich in no time, at least through newsletter subscriptions.
    I'd probably get investigated by the SEC, though, and get thrown in prison. They'd never believe anyone could get it wrong so consistently without the benefit of insider information. Somehow, I'd have to convince them of my incredible intuition that allows me to make the wrong choice every time. And that wouldn't be easy.
    So I'll just trudge on, making my own little mistakes, waiting for the law of averages to work its magic. I will find the next Google, or the next Microsoft, sooner or later. That's why my friend continues to listen to me. He knows no one could be wrong 723 times in a row.
    "So what do you have this time?" he asked when we met for lunch last week. "Your last hunch forced my kids to drop out of college because I could no longer pay their tuition. I'm sure you can find something worse."
    I looked around to make sure no one was listening. Then I leaned over the table, motioning for him to come closer. With our heads only inches apart, I gave him the name of the little company that I had a hunch would make us all very, very wealthy.
    I had never seen my friend so excited when he heard the news. It turned out he already owned significant shares in this company. Without missing a beat, he whipped out his phone and called his broker.
    "I can't tell you where I got the news," he said to his broker as I blushed, "but it's very valuable information. All I can tell you is you need to sell every single, stupid share I have in that company."
    It wasn't what I expected him to say, but it did get me thinking about my newsletter again.

 

 

 

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