Imagine $ 3 stocks opening at $ 10 the next day . It was easy money . People who did not have a damm clue thought they were market gurus
The pool in my backyard still has a nice sign on it I had made that says CMGI Pool - not Gillette pool.
And who can forget going on a message board and daring to say something negative about a stock... everyone would attack - especially the resident pseudo-gurus with their valuation analyses explaining exactly why XLA should be trading at 500 a share - conservatively. People would be accused of posting for pay, or of being brokerage spies trying to shake out the little guys. I participated in one or more of these dogpiles (or maybe more like piranha feedings) myself, along with one guy I knew who fancied himself a bit of a whiz, loved to play small caps. He absolutely hated the "shorts." By that Spring, when he had managed to lose his college money and his rent money - much to the chagrin of his wife, and maybe of his kid, too - he was still screaming about the shorts... One day the subject came up again, and something he said made me realize that he didn't even know what a short was: He thought it meant "short-term." It was just like in the classic stories about the roaring 20s: Everyone was "in," everyone knew everything, and no one knew anything - the hairdresser, the guy next door, the other guy next door, your ex-girlfriend, everyone. They were all maxed out on margin, all the time, and virtually none of them understood how margin worked, how fast being margined up could wipe them out - that is, if their precious stocks happened to go down instead of up... as if THAT ever happened.... For a beginner it was an unbelievable trap: After seeing some stock you sold for some "paltry" 10 or 25 or 50% gain, but which went on to make a "ten bagger," you swore NEVER to sell a good tech stock again (at least prior to your retirement), and you prayed for the opportunity to "buy a dip." The bull market mentality lasted much longer than the bull market, of course. I would wager that the majority of those who weren't serious traders, and even a lot of them, and who weren't blown out, averaged down, all the way down, and bought back again and again on the first sign of strength. Probably won't get too many of the blow-out stories here - most of us are obviously survivors. I don't think that many of the "clown geniuses" who made a killing during the fat times, but threw it all away on, say, out of the money SUNW calls or CMRC at a price that just had to be a bargain are frequenting trading sites much these days.
Anyone remember XING? afterhours some CNBC announcement on china and internet providers? Went from .75 to 21 afterhours, (aka crack plays) and to low 70's within 2 days? PUMA from less than a $ to over 100 in just over a year? KTEL from low teens to low 90's in a day. Knew a trader who puked his account short from high twenties to mid 70's kept adding on it , covered over 4k shares, in 3-4 days. Magna! that XLA was classic, and the scoop behind it is even better: ...He gave the world a $299,000-per-year dot-com stock, and a company in the Turks and Caicos Islands wound up with $425 million in cash. Like I said, Big Alâs our kinda guy.... http://www.observer.com/pages/story.asp?ID=4681 Those were some wacky moves. Josh
I was at an annual meeting in Boston when David Wetherell, the CEO, asked these two pimple faced jerks in the crowd to stand up. They were the two guys that started Raging Bull. DW related how they had been offered 200M for the company and turned it down. CMGI maybe only has around 200M cash left now. I can also remember 4 splits and a day it went up 75$. On the net somewhere, somebody had CMGIs stock port folio of other companies which I seem to think may have got up to 11B at one time - might not have that right. Within the last year, I heard of a divorce where the couple is fighting over a few thousand shares short from somewhere well over 100$. Also remember my ex father in law, a CPA heavy, reading an annual report and saying house of cards, house of cards... . They actually had a lot of good ideas - just the internet time was too soon. One I remember was internet radio called ICast - best damn international radio I've seen yet.
i had a landscaping business at the time & doing trades from my truck....i`d call my friend,whom had a small local brokerage firm,i`d give him my buy orders at 9:25..........calls on LU,IBM,CSCO,MSFT,DELL,AOL,etc..........he`d beep me #44 on my beeper to let me know i`d been filled.................i`d call him back around 2:30 & give him my sell limits........around 3:30 we`d start the #44 all over again..............had many net 10K days.....& a couple on just LU alone.that was definitly my baby,i`d day trade calls on LU & just roll them back & forth all summer long.pretty damn exciting for a 27 yr old grinding it out with a back breaking business. i saw the writing on the wall in late 1999 with everything from my chiropractor giving me stock tips to Shaq endorsing a brokerage firm & of course the death knell of CNBC song of "i`ve got the world on a string".........got myself 100% flat & liquid as well as my entire family by late dec./ early january.........& still get thanked profously to this day during family get togethers. although history always repeats itself,i believe that was a once in a lifetime experience............& when the generations that witnessed it move on..........the next generations will create another one.........maybe in our later stages of life,we`ll get another & the old & wise will capitilize heavily.
My co-worker turned 7500 USD into well over 75,000 within 6 months to 1 year. To this day I remember walking with him to our local bookstore, buying the lastest issues of Money, Smart Money, Kiplinger's etc, and then walking back to work while he excitedly talked about Cisco, JDSU, etc etc. When he began trading, I inputted all of his trades in a Yahoo account I created for that purpose. I tracked him trade by trade to 75,000. Today, I no longer track his trades. He stopped telling all after he hit the 100,000 mark. I don't know for sure but someone has confirmed that he has somewhere around 500,000 now. All based on his original 7,500 account, i.e. no additional money entered. The only thing different is that he no longer day trades, and apparently all of his holdings are on long term calls. By the way, he gave the office a tip in early 2003. Bet the farm on emerging market stocks, i.e. EEM ETF. From then until I exited the emerging markets in April 2006, I doubled what I put in that trade. I wish I had allocated more to the trade. Fire and forget.
I've never understood it why they say trading is a zero sum game. If someone wins, someone else has to lose -- just doesn't make sense. Seems here most people made out like bandits in the 90s. And with Enron -- most people lost -- who the hell won (short sellers but they are rarely 50% of the float)