It’s the Pitts 8-9-10
August 9, 2010
I am not what you’d call a “big player” in the market, other than the one that sells roast beef, panty hose and motor oil. To me, the term “playing the market” sounds like a game of Monopoly, a game I’ve never been good at. Without the slightest suspicion of anything to do with the intricacies of the market, I’m always amazed when people ask me if now is a good time to buy stocks. In reply I always quote the Warren Buffet of his generation: Will Rogers. “Don’t gamble. Take all your savings and buy some good stock and hold it until it goes up, then sell it. If it don’t go up, don’t buy it.”
One of the few times we did buy stock we’d have been much better off just burning the money. It was a few years back and my buddy Rum Dum had sold his saddle, bought a briefcase and became a stock broker. I was one of his first victims.
Rum Dum called up and invited me to a symposium of very rich and powerful people just like me. The idea of a free lunch appealed to me, as did the prospect of seeing how Rum Dum looked in a three-piece business suit. So I went.
For some reason I was the only rich and powerful person who showed up, and my lunch was a week-old croissant left over from the last meeting of powerful people. I’ve seen cowpies that looked more appetizing. We met in a conference room where experts on TV were handicapping stocks as if they were horses in the third race.
Rum Dum began the symposium, “I’ve invited all of you here today …”
“Excuse me. Since it’s just you and me, you don’t have to use the microphone.”
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“If I might continue? I’ve invited all of you here because of an investment opportunity the likes of which I have never seen in my investment career.”
“Rum Dum, you’ve only been a stock broker for two weeks.”
“How many of you,” continued an irritated Rummy, “are struggling to find money making opportunities in today’s difficult investing environment”
One hand shot up.
“How many of you need professional help in making investment decisions?”
No hands shot up. “Rum Dum, you’d be the last person I’d ask. Don’t forget I knew you when you were making $1,200 a month and your investment portfolio consisted of losing lotto tickets.”
Rum Dum cleared his throat and continued. “Everyone knows that over time the stock market is the only option sophisticated investors have to steadily make 10 percent.”
“Pardon me, but are you nuts? People with money in the stock market in 1929 didn’t get back to even until 1954. Between 1966 and 1983 you didn’t make a dime. The only difference between the stock market and the Titanic is the boat had a band.”
Ignoring the heckler in the audience, Rum Dum continued. “My team of professional money managers, using sophisticated computer software, has identified one investment opportunity that we are offering only to our upper-income clients.”
Confused, I looked around but I was still the only one in the room.
“One word,” Rum Dum advised. “World Com. It’s going to take off like a rocket!”
Even though World Com sounded like two words to me, I gave Rum Dum $3,000 to buy World Com Stock because I’d never ridden a rocket ship before. I’d no more than put the gilt edged stock certificates in the safe when World Com stock started plunging. The rocket ship was in reverse. The stock went to zero, the company declared bankruptcy and the only people who made any money on the deal were Rum Dum and Bernie Ebbers, World Com’s CEO. Hey, two out of three isn’t bad, I suppose.
In the aftermath, Bernie Ebbers was named one of the top 10 crooks of all time, I haven’t bought another stock since then, and Rum Dum is back to doing something he knows a little bit about. The only stock he follows these days all have four legs.