Don's Birthday
My friend Don called the other day to wish me a happy birthday. “It’s not my birthday,” I told him, and he responded to say that it’s his birthday, which is the same day as my wedding anniversary. So, he wished me a happy anniversary, and I was obliged to wish him a happy birthday. I had been set up.
The
next thing he said was “what do you think of the market.”
I
know that this was the real reason he called. Don worries about his retirement
money investments. I went into my canned speech and told him that he must view
the market from 30,000 feet and take the long view. Be happy with those gains
that appear when you “look down from the sky” for 1994, ‘95, ‘96, etc.
“Don’t get caught up with the short term”, I counseled.
Don
hired Tom to manage his finances several years ago, mainly his tax-sheltered
retirement money. Tom really earns his commission. When Don knows that he has
called Tom to the limit, he looks for other people to call, like me. Yeah,
right, like I’m the whiz (the same guy who decided to sell his value-based
mutual fund a year and a half ago to buy individual tech stocks – buy high,
sell low).
Don
explained to me that he hired Tom because he didn’t have the nerve to take
risks in the stock market himself. Don further explained that he should have
converted his stocks to money market accounts last fall, and now he would have
all that cash available to reinvest in stocks and be set for the big rise he
believes is about to happen. I told him that 90% of the people in the market are
saying the same thing.
A
few weeks ago, Don was so bold as to instruct Tom to take the two thousand
dollars that was sitting in his cash account and buy 100 shares of Sun
Microsystems at $20. Since then it has dropped to $15 (Don has a number of shares of Sun that were as high as
$65 a few short weeks ago). The best laid plans…
I may be writing a postscript to this story later this year or maybe next. According to some of the “experts”, the market will go up and for the others it will go down more. We will have a V, U or L shaped recovery. Greenspan and dubya want the market to go up according to some columnists or, according to others, they are engineering the big recovery to occur during the critical political period leading to the 2004 presidential elections. I hope that the recovery comes pretty soon. Not for my sake, but so I don’t keep getting “birthday calls” from Don.