MY wife and I belong to an investment club comprised of UH classmates who got their MBAs together, plus spouses and friends. The idea is to socialize, invest the few dollars we can afford to lose and learn about the market. Did somebody say
‘capitalism?’Beardstown Ladies we ain't. We're thinking of renaming the club ''Kiss of Death.'' We have a knack for picking big losers.
There was the HMO that plunged from $80 to $26 in one session and the Wall Street-darling conglomerate that confessed it had cooked books and dived from $40 to $10. We're now parties to two class-action investor lawsuits.
We found an employee-leasing firm that was marching up the charts. As soon as they booked our trade, however, the CEO was arrested in a prostitution sting. Then there was the electronics company with the break-through product. We bought at $3.50 and rode it to 15 cents a share. I stopped reading Business Week.
Because we rely on Macs to put out the paper, I follow Apple Computer closely. Its new products are big hits and experts predicted they'd announce record-breaking earnings last Wednesday. So, on my recommendation, Tuesday night the club bought Apple. Next day, the company announced earnings better than the most optimistic forecasts. Thursday, the market surged 300 points. Yes!
The stock we bought at $39 dropped to $36 in two days. ''Buy on the rumor; sell on the news,'' they say. Kiss of Death, I say.
John Flanagan is editor and publisher of the Star-Bulletin.
To reach him call 525-8612, fax to 523-8509, send
e-mail to publisher@starbulletin.com or write to
P.O. Box 3080, Honolulu, Hawaii 96802.