Some of his stocks
and why he
what October '87
why he is a true believer in mutual funds
Jim Cramer manages a hedge fund
and is a columnist for New York Magazine and the author of "Smart
Talk about today's small investors in the market....
There are two tiers of small investors. There are the people who
religiously invest because they've been taught by Fidelity, by Peter Lynch, by
the magazines, by historical data that the stock market is the best place to
invest. And these are people who, in any other field, we would say, "Well,
they're just following the empirical data."
And then there's a whole other tier of people and they're the tier of people
who have no rationality, they just chase what's ever hot. And these people
have now decided that stock are out of fashion and they're not they tend to be
in whoever was a hottest, thereby, make whatever was the hottest the coldest.
And that's what we're up against.
So all these people who have shoved money into mutual funds are
pulling it out?
All the people who shove discretionary income into mutual funds in order
to be able to make money, as opposed to invest for retirement or invest in a
kind of a historical fashion, in other words, well, for me, I've got a two
year-old and a five year-old and at the beginning of each year I don't say, "I
don't care." You know, I don't say, "Geez, the market's really bad this year.
I'm not going to invest." I invest for them, but if you have discretionary
money and you invested for them, now you're more than likely on the margin
Now, take the emerging foreign country melt-down that we have in Mexico,
Argentina, and Brazil in '94. Those were the people who sold were people who
had chased previously good performance in '93. Now we have seen those funds
suffer massive redemptions, at times being down as much as 40-50 percent.
That, unfortunately, is the paradigm for the emerging growth investors this
time, because the guy who was chasing '93's great performance got crushed in
'94 is the same guy who was chasing '95's great performance and is now being
crushed in '96. So he withdrew.
So the guy who jumped into Garret Van Wagoner's fund this past April
and May is the guy who's pulling out now?
Because he was chasing that 60 percent?
Well, he's just the same guy who in other aspects of his life
would be very late to a trend. There are tons of people who are late to trends
by nature and adopt a trend after it's no longer in fashion. They exist in
mutual funds. They exist in clothes. They exist in cars. They exist in
But there's a lot more at stake here?
Well, yes and no. Yes, if they're a big enough pool of capital
that they can begin to dent people's confidence in the historical positives and
stuff. I mean that's what we're fighting against now.
You have a class of investors and you have a class of speculators. The
speculators historically haven't been big enough to cause the investors to
doubt the long-term vision of stock. In the last two or three years there's
been a form of people's capitalism that has turned a lot of people into
thinking that they could be speculators and be as successful as I've been or
other traders have been. Those people are very vulnerable. I don't know
whether there are enough of them to make it so that the investors get nervous.
The guy who every three months commits money to his 401K, I don't know. Maybe
he just says, "Well, this is a bad time." That historically had not happened.
The second we have not had a wholesale panic of investors. We've had very
often wholesale panics of speculators. We're having a wholesale panic of
speculators now. The question is, will it bleed into the investor side? I
If the market's so dangerous, why should average people be in
I don't think the market is so dangerous. In 1990 we had a full-scale
bear market in the financial stocks. You had Citicorp, Chase, Chemical Bank
losing 70-80 percent of their value. Okay. That was a sector that was
decimated. In 1994 you had foreign country funds decimated, okay. In each
case there were speculators betting that Chase had the stock going down, didn't
realize the dimension of real estate problems. There were speculators saying
that the foreign stocks had the stock going down. They were all wrong. Those
classes of assets were dangerous at the time and they became great bargains.
What I'm saying is that there are bargains right now, there are stocks right
now that if you're shrewd enough, you will be able to buy them at the opening
today and I you'll make money in a year from now.
But don't you have to be a professional to be that shrewd?
I think that there are changes that have occurred in technology
that make is that more people can have the same level of information that I
have. My advantage is that I'm very good at interpreting the information. The
danger that we have right now are people who get the same information as I do
and, therefore, think they'll reach the same conclusions that haven't traded as
long, don't have bear claws up and down their backs like I do. I mean I've
lost tremendous amounts of money in various markets and I think that that's
something that makes you better at my job, not worse. I think a lot of the
people who are in now haven't lost tremendous amounts of money yet, don't want
to, but will. But they won't lose 'em if they're in companies that are real.
I think that let's take the case of Phillip Morris. Let's use
Phillip Morris because it's big and controversial. It's got a lot of problems
from cigarette litigation. I own Phillip Morris. I'm not as big in it now as
I was before, because it happened to visit the 80s, it's now at a hundred. It
was down 15-20 points and I bought a lot of it. But Phillip Morris is the
highest yielding stock in the Dow Jones. Its yield is safe. The dividend is
safe. Its earnings are growing terrifically and it's going to get pulled down
with the rest of the market in the same way that in 1990, Merck and
Bristol-Myers initially got pulled down with the rest of the market when Iraq
invaded Kuwait. Six months later Merck, Pfizer, Bristol-Myers were up
dramatically. A lot of other things kept going down. Six months from now I
believe that the same tiering will occur. They will be very solid financial
stocks, like a Phillip Morris, that could be much higher. But those stocks
have not caught the fancy of the speculative public. The speculative public
is indulged in stocks that I have no confidence in. There's a stock that I am
sure of right now, Iomega, that is the third-tier player in a very cyclical
market, storage for personal computers. My first-tier players, Sea Gate and
Quantum, go down every single day and they're doing fine. The second-tier
players are teetering on bankruptcy. Amax Corp., bought by the Koreans last
year, this time Connor Peripherals had to be bought by Sea Gate because it
was doing so badly. The third-tier players, Iomega, IMP, historically in
this era when PC sales are threatened if there's a lot of competition in
storage, the third-tier players usually cease to exist in six to eight months.
Now the idea that Iomega could be wiped out never entered in the minds of any
of the people who are involved in Iomega. Iomega became this year's
Bristol-Myers. The problem was that Bristol-Myers was an unbelievably
well-managed company with huge earnings, huge assets, great balance sheet,
great dividend, and Iomega is a company that just got in the business
basically. The balance sheet is fine. The management's never been tested.
Alan Shubart, who runs Sea Gate and anybody would tell you he's the best
storage manager in the industry, is saying we're in horrendous times. He's
seen every up and down. The people who run Iomega haven't seen anything.
Hewlett-Packard, which is the foremost computer manufacturing company in the
business is getting out of the storage business. They find it to be too
competitive. How can Iomega make it? Now I'm picky on Iomega in part
because Iomega became an entity that people viewed as a savings bond with an
earnings kicker. And it turned out to be no more than just a piece of paper
that is split many times. I think that that's indicative of where we're
Tell me why you think the stock market is sort of the ultimate
salvation for the middle class in today's world?
Well, when I speak of the term "the stock market", I'm invariably
speaking of good American companies that tended to be not that sharp in the
'70s, got sharp in the '80s, and are now unbelievably good in the '90s. There
are companies out there in our country who historically have not been able to
beat the Germans and the Japanese, who now beat them routinely. These are guys
who've been able to handle any of the slow-downs that we're seeing in the
current economy, or whether any of the interest rate up and down, Federal
Reserve cuts, Federal Reserve hikes -- these things are just not that
meaningful longer term to these great American companies. And these great
American companies, by virtue of the fact that they are part of the stock
market, can go down as a function of the stock market. Compaq, MicroSoft,
Intel, they're stocks. So, therefore, when the stock market goes down, there's
a good chance that they will go down. And I want to buy them, because
historically these have been great engines of enrichment for the middle class,
"historically" meaning now for a good ten years. And I think that'll continue
in the same way that in a previous generation when were under-retailed, if you
had bought Wal-Mart Unlimited, you could have become rich. If you bought
Intel, you could have become rich away from your job. I don't think that's
changed at all. I think there are a thousand stocks out there that could make
you rich, totally independent of what you do for a living. There've been
fortunes made in Merck. There have been fortunes made in Pfizer. There will
be fortunes again made in Merck and Pfizer.
Then there's another whole class of stocks that were created to be able to meet
this demand that's come from the tremendous in-flows of capital. Thousands of
companies have been created in the last two or three years. They've not been
tested in an economic downturn. Their managements are not as shrewd and
Hewlett-Packard. They're not as good as a management of Intel. They haven't
seen downturns like the management of Merck. They're untested and they're
dangerous and what I'm saying is that if you were to re deploy in this morass
of a summer market that we have, in situations that where managements are
fabulous, where balance sheets are good, where historically they've been very
shareholder sensitive, nothing's changed. These will be fabulous investments
and will make millions of more people rich.
I'm a huge believer in mutual funds. I think that mutual funds are the
antidote to the kind of speculative craziness. The managers tend to be really
good and if they're not good, they're fired. There's accountability in the
mutual fund industry. And they've been tremendous engines of wealth for people
and they're going to continue to be so. Individual stocks would be also great
engines of wealth, but for a lot of people it's just too hard to pick. In the
meantime I question who in this country has made the kind of money at their job
that they've made in their mutual fund? There are periods where mutual funds
won't make any money, but historically no one got a 33 percent raise last year,
that I know of, unless they were in an S&P fund. I invest in funds myself
even though I run my own fund for my daughters. I have a five year-old and a
two year-old and every chance I get that the government allows, I put money in
for them in mutual funds. And I don't really look at the price of the mutual
funds because I know that 30 years from now they're going to be higher. But I
would also say that, capitalism is raging rampant across the world. We're the
primary place of capitalism. I believe that stocks like Bristol-Myers, had
they existed in the 1800's there would have no Marx, there would have been no
communism because what's happened is these stocks have made many millions of
people rich. And they're gonna do it again.
Let's take the quintessential American stocks. Let's take Merck and
Bristol-Myers. If these companies had existed a hundred years ago and
everybody was allowed to be invested in them, then you would have had a sizable
class of people worldwide who would have been wealthier. I think that stocks
have been this tremendous, tremendous equalizer for people in this country.
Guys who can't make a lot of money at their jobs have been able to make a lot
of money in the stock market. There are going to be periods when that's not
true, but historically it has been true. If you had bought Merck in the 1950s,
just bought 10,000 shares of Merck instead of buying US Savings Bonds, you
would not ever have to work again for the last ten years! I mean it's that
simple. The compound nature of the dividends and capital appreciation of Merck
for the last 25 years has just been far better than what Warren Buffet has
done. It's been as good as what Bill Gates has done! You know, let's say you
had bought Microsoft when it came public, let's say you didn't sell it or
didn't flip it like I did when I got my Microsoft, but you just held onto it.
Well, you would be a multi-millionaire. That process is not changing. It's
dynamic. There is another Microsoft out there right now. I am doing my best
to find it. There's another Amgen out there right now. I am doing my best to
find it. I will find it before the public finds it. I will get out of it
before it's too late. The reason I will do that is because that's what I'm
paid to do.
Why should middle class people have confidence they can do it,
Well, I mean, look, middle class people, they have two options.
They can get all the information I do and spend an inordinate amount of their
time in their day trying to pick stocks. And I think that's, for a person of
leisure, that's perfectly good. I think you'll do as well as most
professionals. Most professionals don't beat the market. Let's not over-rate
my industry. But if you have time, you can be in good mutual funds that have
good records. There are people who've historically beaten the market both in
good and bad times. I've historically beat the market in good and bad times.
And I will tell you that I will -- if you can't find the next Amgen, I'll find
the next Amgen. If you can't find the next McDonald's, I'll find the next
McDonald's. But it's vital to be with people who with looking for 'em, because
they do exist. They are created. Microsoft was not a mysterious, strange
entity. You put your PC on and there's an ad for them. You put your TV on and
maybe you get an ad from Proctor & Gamble, maybe you get an ad from
McDonald's, maybe you get an ad from Ford, but you put your PC on and there's
just this huge ad for Microsoft. This was not a hard concept to come up with.
Now if you couldn't come up with it, the mutual funds came up with it. Intel.
I mean, you know, every personal computer has Intel inside. Well, you know,
that doesn't seem that hard for me to be able to find. Now there are times
when everybody recognizes that Intel is great and then maybe Intel get
over-done and it comes back down. But, you know, these are companies that in
my lifetime have put on 30 and 40 billion dollars of market capital. You know,
they couldn't have been a secret.
Do you think that over the long term stocks will outperform every
other investment known to man?
The party line is that stocks historically have outperformed all
other investment plans. I can either decide that this time it's different and
that stocks will not outperform, or I can recognize that even in that period of
history -- there have been periods where it's been horrendous to buy -- or I
can just say, "Okay. I can't time it at all and I'm just going to buy with my
eyes closed." And, strangely, this one of the few things in life that the
third, the latter, the buy with our eyes closed has actually done better than
everybody else. Let me give you a stark example of something that I came up
with. If you had bought the ten most active stocks on the New York Stock
Exchange Friday before the market crashed in October of '87, and I was trading
very actively in October and I mean I, you know, lived through that market --
if you had bought the ten most active stocks the day before, arguably the
dumbest day in history to ever buy stocks, you would have been up huge three
years later. That, to me, is very telling. What that says is, had you just
bought in the ten most active, that's basically saying the ten most popular
stocks, if you, name me another class of investment that if had bought the ten
most popular ideas of in any particular era that you would be up five-ten-15
years after that moment when the -- when the place has crashed -- it certainly
wouldn't have worked with gold. These are not tulips. If you were the last
guy to buy tulips in Holland before they crashed, you haven't made a dime! But
if you had bought that most active list, you would have made a fortune! It --
doesn't that say that here's an asset class that works over the long term if
you can buy it on the dumbest day in history and make a bundle?
The whole idea that there are actually more people in the market
than the numbers would suggest.
I think the numbers about how much stock people own in this
country I think are dramatically understated, and here's why. We typically
hear numbers that there are 34 million households that are in stocks in some
form. Well, I say that what's occurred is if you have a job in this country,
you're in stocks. When I see the employment as strong as it is in this country
and the job creation, the 10 million jobs that have been created during these
last four years, what it says to me is 10 million new stockholders because if
you have a job, it's likely that you have a pension. If you have a pension,
it's likely that it's invested in stocks. If it's not invested in stocks, it
should be. If you have a 401K plan, it's invested probably somewhat in stocks.
The mutual fund industry is as popular in this country as credit cards. The
way the credit cards were made in the '80s to be a people's form of capitalism
and be able to make it so that you could get a loan that you would have been
denied previous, now that's the way stocks are. Historically, stocks have not
represented as big an asset class as homes. I think they're passing homes. I
think it makes sense that they pass homes. I think the idea that homes are a
great investment doesn't make sense to me, because everybody can make homes. I
mean homes are very easy to build and buy. But I think that the idea of saving
for stocks is a hard thing that people in this country have embraced. I think
our savings rate's much higher than Japan at this point. I think our savings
rate's much higher than Europe. I think our savings rate's probably a highest
in the country, but it's understated by these figures.
Because savings rate doesn't included mutual funds and
Savings rate doesn't include pension. What I mean is--
savings rate has still kind of caught up with what's in your passbook it
doesn't really take into account the vast billions that have been created
during this period and the vast billions that are being put in all the time.
Our country obviously has a surfeit of capital, which is why so many companies
were able to come public during this period. But I think that the public is in
and the public is in big, and the public is not, I don't think going to pull
out because the public knows what I said about 1987. If you had bought in
'87, which was the worst time in my life to buy, you came out great. Maybe
this year - maybe 1996 is going to be the worst -- the second worst year of my
life or it will turn out to be another good opportunity.
What was October '87 like for you, the day and that week?
Well, fortunately, one of the reasons why I'm here, one
of the reasons I have my own firm was that I was in cash for the crash. I had
sold everything the Friday before at some really horrible prices and I came in
on Monday morning -- I actually had predicted to people that I thought that we
could be down, that we would crash that Monday, and I was liquid. And it
distinguished me as being somebody who had a cooler head, but I was able to
pick up tremendous bargains. I had nothing in the market then.
Talk about the meritocratic nature of mutual funds.
The mutual fund industry is an amazing industry. I think it's
both a brilliant predictor of what technologies are going to work. Our mutual
fund industry has funded this trumping of Japan and Germany. People don't
think of it like that, but that's the only way to look at it. The mutual fund
industry provided the money for Intel and Motorola and Hewlett-Packard to crush
the competitors. The mutual fund industry has been an absolutely terrific
barometer of where money should go much better than any government program,
much better, it turned out, than MITI in Japan. And the reason why it's been
so right is because while it may not be accountable in the sense that we think
of, that people aren't elected to be the president of mutual funds and you
don't hear high profile managers being fired, but it does happen all the time.
If you're good in this business, you get paid a fortune. And if you're bad,
you're fired. And there's no unions to protect managers. There's no
entrenchment. There's no board of directors that historically just check off
on managements, unlike there are in the lot of S&P 500 companies. I mean
it's the most objective industry in the world. If your numbers stink, you're
out. If your numbers are good, you get more money. It's the most Darwinian,
it's beautiful, it's brutal, it works.
Talk about the Peter Lynch phenomenon.
I'll tell you the truth. I think that the idea that if you do
well, you become a celebrity is nonsense. I think that to this day the only
mutual fund manager anybody knows is the guy who's running Magellan.
It was Lynch. It was Vinik and that was because they were the only managers
that got any press scrutiny. Can anyone name the manager of Capital Research
which runs untold billions? Does anybody know who the managers are at Windsor,
at Hutton. I mean these guys run billions. Well, we don't even know who they
are. I don't even know who they are. I've met them and I don't know who they
are. I mean I can name you some third-tier actor, some bit player in
"Independence Day", but I can't tell you who the hell is running MFS, the
oldest mutual fund society in the country!
There's no glorification or celebrification of managers. Periodically I see
on CNBC some guy saying, "And they asked me for my autograph." I mean who
else has made you that much money? I'd like the autograph, too, if they made
me all that kind of money. But the idea that they're famous, no. I think it's
just the opportunity. I think they should be more famous. I think there
should be far more scrutiny. I'd like to know who they are. The industry's
done a very good job of saying that they're not the guys who are in charge.
It's the company itself, but most of these mutual fund companies, the guy who
runs the company is just a fact totem and the guy who runs the money is the
power. But we really don't know who they are. Five years from now I think
you'll be able to name the top 25 mutual fund managers in the country in the
way that you'll be able to say who runs IBM and who runs Ford Motor and who
runs Chrysler. But right now, nah. I mean people know that Vinick was
deposed. I don't even think people know who replaced him yet. I don't see
that celebrification people talk about.
What do you think of Peter Lynch?
Peter Lynch made me a lot of money. So I like him. I had my IRA
with him when I was making $125 a week as a cub reporter. He made me more
money than I made in my job. To me, he's in the Pantheon.
What do you think of his thing that anybody can basically do what he
I was given Peter Lynch's first book to review about 15 years -- I guess
10 years ago, whenever it came out, and I wanted to savage it. I said, "Ah,
I'm a professional. This guy's probably giving people advice gonna lose 'em a
fortune." I read the damned thing and I immediately changed four things that I
did at my work. Made me a lot more money. It killed me how good the book was.
The second book I didn't think was that good because I think he said
everything he really needed to say in the first book, but I think they wanted a
second book because that's the nature of the industry. But Lynch has been an
inspiration. I decided I kind of feel like that I got in the business because
Lynch said that you didn't have to go to Harvard Business School to be in the
business, that you could pick stocks. I mean Lynch gave me hope that amateurs
could turn pro. And for that, I'm forever indebted to him. I never met him.
I actually wrote him a letter when he was under attack last year. I didn't
hear from him. I have to tell, ya', but that's like me, trying to shake Joe
DiMaggio's hand and Joe DiMaggio saying, you know, waving me off. But that's
okay. Joe DiMaggio never made me any money.
Talk about leaving the stock tips on your answering machine in law
I was in law school at the time. I went to law school in 1981 and
every dime I could get from any job that I had I was throwing into the stock
market. And I was so confident that I was even using, in my answer machine
each week I would add a stock of the week, because I thought the market was so
unbelievable and that we were coming -- this was in summer of '82 I thought we
were on the verge of an unbelievable bull market which 14 years later turned
out to be dead right. And I played it to the hilt and I made a fortune while I
was trading out of phone booths at law school. I made a small fortune. I
made a lot of money and I made a lot of other people wealthy.
And the reason why I got into the money management business was there was
someone who was trying to reach me on my answering machine, a very wealthy
individual who wanted me to write an article, because I was a journalist before
I went to law school, and after three weeks of fabulous hits on my answering
machine, he decided, "Look, I don't want you to write an article for me.
Here's a million dollars. Go make me some money." And I mean at the time it
was not a wealth individual. I did not come from a wealthy background. I
thought that maybe, hopefully, Peter Lynch would make me that in my retirement
age, 65. And there it was at the coffee connection, there's a check for a
million dollars right in front of me to go invest because of my answering
machine. And I did it and I made millions with it. I've been blessed and
lucky. I think the one thing I would have to tell you is the market's very
humbling. I have never for a minute felt in was my stock picking abilities. I
feel that my stock picking abilities aided-- I was able to pick out which are
the good stocks in the good market, but I have been blessed with a great
market. I think that I could have been take apart if the bear market
continued, but I waited three years before I felt the bear market was over and
I was right. But what I'm saying is, I guess, is that anybody who thinks that
their more smarter than the market, they're the guys who bought Iomega 40
points ago. I mean I'm not smarter than the market, but I can recognize a good
tape and a bad tape. I recognize when it's right and when it's wrong and
that's what my strength is. I mean that what makes me a professional, but the
market itself has been fabulous during this whole period and I've got to give
the market credit before I give myself credit.
Talk about the amorality of the market and the downsizing.
There've been two great downsizing eras in our country. There
was the '80s downsizing era which was brought on by the fact that managements
were fat and happy and had too much, too many people on the payroll, and
weren't leaning on them or getting their head handed to them versus foreign
competition. They had too many country clubs, too many airplanes, whatever.
And raiders came in and rationalized those and then the raiders got too greedy
and the raiders blew off. Good riddance. The second form of downsizing, the
downsizing, the corporate killer downsizing, is directly responsive to what the
mutual funds have wanted. Guys who have fired people and restructured in this
environment when we've been winners and the economy's been good, in other
words, they're not motivated by the fact that the economy is soft, are guys who
are trying to please their shareholders. In the '80s they didn't give a darn
about the shareholders. In the '90s the shareholders are supreme, because
these managements are constantly meeting, these managements are incentivized by
stock -- they're constantly meeting with their big shareholders who tend to be
the mutual funds. Don't forget the mutual fund guys keep their job only if
they pick the right stocks. You can pick the right stocks and get lucky or you
can make companies into the right stocks by demanding certain changes, by
demanding changes at Sears, by demanding changes at Xerox, by demanding changes
at IBM. If you just take a look -- take a look in New York, Chase Manhattan
Bank, big sleep bank, nothing really to write home about. Shareholders,
activists, mutual funds forced the sale to Chemical Bank, make a fortune for
everybody -- management, shareholders -- would never have happened in the '80s
'cause the shareholders didn't care because they weren't organized. They
weren't mutual funds. There weren't blocs. Management didn't care what the
mutual fund said. Managing was worried about raiders in the '80s, but you
couldn't have financial take-overs the way that you could have in the '90s
because managements really didn't own a lot of stock. Now you've got
managements owning stock. You have a mutual funds owning stock. These are
powerful forces toward creating more efficient, but, unfortunately, more brutal
places to work at.
So should we worry about those laid-off employees?
Well, I have stressed over the last year that the only part of
this whole capitalist engine that is a problem is the fact that if you're left
off the capitalist engine, it's probably by chance or luck, ill luck. And
something should be done about it. I have felt that there should be stock
that's available to people who are laid off from companies so that they can
take advantage of the appreciate that the stocks undergo after they're fired.
The stocks go up because their more leaner and mean. They don't go up because
they got rid of dead wood. Look, the people who've been laid off in the
country for the last five years, they aren't dead wood. They're just guys who
marginally weren't as profitable as other guys or they were guys who were
profitable and they just took the buy-out. And nobody cares. The government
doesn't care. The companies don't care. And I think that's a shame, which is
why I went to the President of the United States and I suggested this plan and
he seemed to be very interested in it and, you know, there've been some
follow-up calls. This issue has died down right now because the way the
corporate killers were on the cover of Newsweek and everybody's been
hushed about the lay-offs. But there are continuing ongoing lay-offs that are
meant to boost stock price and the fact that nothing's being done about the
people who are laid off, through no fault of their own, I think is not
criminal, but it sure is unethical. I couldn't live with myself if I was
running one of these companies and I didn't give these people stock after I
But your answer is rooted in the stock market.
I have to believe that the same thing that caused these lay-offs,
which as increased stock performance, can be extended, yes, and it's
generosity. It's not capitalism I'm talking about. It's just shame and the
belief that you have to live with yourself -- I think we can extend that to the
people who've have been made to be fringe players by dent of their age or how
much they were paid or because management wanted to be on the list.
In the course of the last year or two there have been tremendous strides
made in disseminating information about stocks to the public. And some of
that's great. You can get, from the SEC, documents as fast as I can about how
well Allied Sink is doing, how well GE's doing, but it's also led to a
dissemination of a kind of daisy chain of overly positive hype among
individual investors who have been cheering stocks on. The people who are
buying stocks because they're going up and they don't know what they do deserve
to lose money. In the case of one-- again we've got this bellwether in Iomega which is a company that, frankly, I mean I knew when it was at two, I
said, "Geez, they've got a hot product." I've lost millions buying companies
with hot products, millions. In every case the situation's the same. I
deserved to lose those millions. I bought 10 percent of a company that had a
device that turns your PC into a TV, brilliant. I could get rid of the TV. I
could just have two boxes be one! I lost every penny I had and I deserved it
because the company's management was bad and they'd never weathered a downturn.
Sounds like Iomega to me.
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