TRL Blog

Archive for November, 2009

I got this discount broker and told him to buy me one thousand shares of Atari. When I hung up the phone, I felt terrific about placing this order. Atari was around $4 a share, and I had read these articles about how they had all these great things going for them—and I have to admit I loved playing those games on the TV set when they first came out. I just thought, Go for it. I had this extra money that I was saving to invest, and I was so excited. I told all my friends before I did this, and everyone tried to talk me out of it, even this one adviser friend I have who said, “I wouldn’t do that if I were you.” But I went with my gut feeling.
Within two weeks the stock was at $8! I couldn’t believe it; I had doubled my money. When my friends heard this—of course I called them all up—they were so sorry they didn’t listen to me. In fact, a few of them decided that maybe it would go up more and bought some. Even my adviser friend started to buy it for his clients. It stayed at $8 for a little, and then I started to get this feeling that I should sell. So I called my adviser friend again—why, I do not know—and asked what he thought. He had just bought it at $8 for all his clients, and what could he think? That it would go up some more. I stayed for a few more days but still feeling I should get out. It went down to $7, but everyone kept saying not to worry, they would announce a deal or something and it would go through the roof. My husband needed a new car, and I kept thinking, Well, just cash in, we’ll have enough for a car. But I didn’t. To make a long story short, Atari did announce this new deal, and before I knew it, back it was at $4. So why did I end up listening to everyone else?
If Janet had listened to that voice in her gut, she would have doubled her money. If her friends had listened to their own voices inside them, they wouldn’t have lost money. If her adviser friend had listened to his own inner voice, he wouldn’t have lost money for his clients and himself, if he had invested, too, although it’s worth knowing that many advisers don’t have the money to invest in their own advice, nor are they obliged to. That little voice inside each of these people, perhaps dozens of people all told, was trying to protect them. None of them trusted themselves more than they trusted others. As a result, they all lost.