Saw the above on daughter Reagan’s website and it reminded me of the following: Years back a stock investor buddy of mine called to give me a hot tip. He informed me that a tech company named Cisco was coming out with their quarterly update in the next couple of days. He noted that the rumor mill had it that the report was not good, that Cisco had encountered some serious problems and that when the report hit the streets, their stock would be going down. My buddy recommended that I buy some Cisco shares and “short it.” When I asked him what that meant he said “You’re betting that the stock goes down.”
Since Buzzy liked to play the stock market, I ran this by him. As I tried unsuccessfully to explain it to him, he advised “If you can’t explain it, you probably shouldn’t do it. I’ll pass.” Instead of listening to Buzzy, I followed my buddy’s advice and bought some Cisco shares to “short.”
After doing the buy, I checked the market quite frequently to watch as the stock edged downward. It had to hit a certain level before it was sold and I made any money. The stock dropped some but never quite made it to the lower number that my buddy had recommended.
On the day before the quarterly report was to come out, the stock began inching back up. My buddy called me and said that Cisco had done some damage control saying that things were not as bad as the report would indicate and that it was just a one time hiccup for them. He noted that the stock would not go down to our number as predicted and that we should bail. I ended up losing a couple thousand dollars on this can’t miss, hot tip.
Meanwhile in the following months and years Buzzy would periodically tell me how good the Cisco stock was performing. I said “I thought you passed on it.” He said “I passed on that “short” business but figured if they were so low, it’d be a good time to buy some of it.” Turns out that after I had told him about it, Buzzy purchased a couple hundred shares of Cisco as an investment and thru the years it performed very well for him. Glad I was able to give him such a good tip. Leads me to conclude that maybe I should have focused more on another of Albert’s quotes:
