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I was all in up in it. Working for a company that eventually got acquired by Lucent. Through the rise and fall of the stock market at the time I was selling m
by brk 18y ago
I was all in up in it. Working for a company that eventually got acquired by Lucent. Through the rise and fall of the stock market at the time I was selling my options and investing the money in other things while most of my friends/coworkers were tracking their paper worth.
In the end, I pulled 7 figures from my options while most people I knew just sat there and let the world happen to them and were left with nothing the day Lucent dropped from about $70 to $50 then kept falling.
The morale: don't be greedy and don't be afraid to exercise some of your stock and diversify should you find yourself in a scenario where your options become worth something.
I also started a company of my own through those years and had a couple of other side interests going on. All in all it was a fun time. I recall spotting some trends, like Fore Systems oscillating between $8 and $10 a share for a while. I would buy 1 or 2 thousand shares on margin, then sell a few days later and cash the check. The stock market at the time was like a giant ATM if you knew how to play it and didn't get too greedy (there's that theme again).
- mattmaroon 18y ago"The stock market at the time was like a giant ATM if you knew how to play it and didn't get too greedy" Lol. I upvoted before I saw that. You think that because you got lucky. Read Fooled by Randomness.
- brk 18y agoMy wife and I both have better than average financial backgrounds. She has a couple of finance-related degrees, and has worked as a financial analyst for many years (since a bit before the dot com times). I also have working knowledge of financial operations. So while there was some luck involved, it was certainly not "fooled by randomness".
- mattmaroon 18y agoRead the book. Most financial professionals (and 100% of people who believe timing the market was ever possible) are simply fooled by randomness.
- brk 18y agoI never believed that "timing the market" was possible so much as I believed that you can leverage other peoples hype to your advantage. BTW, I also made a couple of bucks in the hyped real estate fiasco, and then bought a condo on Lake Winnipesaukee, and then stopped. The difference is that most people over leverage themselves and keep going for "one more fix". Again, rather than being greedy in highly unstable markets I chose instead to get in and get out, in theory I'm leaving money on the table, in reality I'm just taking advantage of things to my benefit and leaving my "real" investments to a more sane and logical strategy.
- mattmaroon 18y agoAll you did was reduce your sample size. That doesn't mean you're any more profitable than anyone else in terms of EV. For instance, if the market crashed during the short period in which you were exposed to it, rather than a little later, you would be hugely negative. Again, read the book. Really, it's eye-opening.
- jaydub 18y agoLike Taleb says, you can pick pennies in front of a steamroller and hope you don't get bowled over.