playing the market

A few years ago, between the 9/11 attacks and the birth of Clementine, I decided to take some money out of savings and put it into the stock market. I wanted to invest in Amazon and Apple. So, I ran the idea by my brother-in-law, the MBA, asking him what he’d do. He strongly recommended that I not invest in either of them. Instead, he said that I should put my money in something like Fannie Mae. And, for the most part, I took his advice.

And this is how those three stocks have done in the years since our talk:

Fannie Mae -82%
Amazon +841%
Apple +1,905%

I did go ahead and put a little into Amazon and Apple, in spite of his advice, but a lot more went into Fannie Mae than probably should have. We’re not talking about tons of money here. Just a few hundred dollars in each. But I still can’t see my brother-in-law without thinking that, if not for him, I’d be a rich man right now. Of course, it’s completely irrational, as the amount I had to invest between the three was fairly negligible, but that doesn’t stop me from obsessing on those Fannie Mae dollars that could have been invested in Apple. I’ll still be thinking about it 40 years from now, when we’re old men, and cursing at him under my breath about that thousand dollars I could have made.

[note: It’s probably worth noting that in all other ways, my brother-in-law has proven to be a great guy… Just don’t take investment advice from him.]

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7 Comments

  1. egpenet
    Posted August 7, 2008 at 7:56 am | Permalink

    I gave my opinion of the markets in a previous post.

    FNM (Fannie Mae) is worthless. They have no cash … just guarantees. And the mortgage assets they hold aren’t fungible. FRE (Freeddie Mac) is worse, if that’s possible. SLM (sallie Mae) which is the student loan program has cash, but is weak. Ford is broke. GMAC is broke. And on.

    World markets are declining. The sicko dollar was up yesterday against every other world currency … meaning … THEY are tanking, too.

    Plant potatoes and hang on.

  2. egpenet
    Posted August 7, 2008 at 10:00 pm | Permalink

    You had more losses today. Sell.

  3. Mark's brother-in-law
    Posted August 9, 2008 at 4:46 pm | Permalink

    And somehow he still hasn’t gotten the message.

  4. Ol' E Cross
    Posted August 9, 2008 at 10:21 pm | Permalink

    Investing has always seemed to me to be a cheap way to make money: guessing right and depending on others hard work.

    I prefer to earn money the old fashioned way … by being unemployed.

    Plus, I don’t just want something else to think about; goes against the unemployment work ethic.

    (But sell. Buy high, sell low. That’s what I’d do in 9 outta 10 scenarios.)

  5. egpenet
    Posted August 9, 2008 at 10:30 pm | Permalink

    It’s LONGS like Mark that keep my SHORTS in good health. Thank you Mark. Hang in there, baby! They’ll come back.

    (Watching Mark lose money and taking some pleasure in it puts a whole new slant on ‘reverting to the mean’ … pun intended.)

  6. Posted August 10, 2008 at 7:03 pm | Permalink

    “Stay Mad for LIfe,” Jim Cramer, 2007, ISBN-13: 978-1-4165-5885-9

    Call # 332.609 Cra @ YDL, but I have it out now so unless the library has more than one copy, you’ll have to wait until I’m done with it and get it returned.

  7. Posted August 12, 2008 at 9:11 pm | Permalink

    I returned the book today.

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