The year was 1999, I was a senior graduating from college, primed and ready to head out into a promising new world. The Internet Age was exploding, and there was money to be made.
It was hard to watch the news during this era without hearing story after story about the millions being made in the stock market by tech start ups, and IPO offerings in the technology fields. I hadn’t graduated from college yet, but i was eager to get a piece of this exciting new action. At one point, I even thought about continuing on in my education in the computer sciences field after spending the last 4 years learning how to drive large ocean going ships.
Then I came up with what I thought was an even better idea. I was going to take the $1000 or so that I had in a savings account and ride one of these tech start-ups straight to the bank. I heard about day trading, and saw ads for Ameritrade.com on TV and in the pages of my Golf Magazine subscriptions. I thought to myself, “hey, I can do this”, they make it look so easy on TV right?
Hesitant, I mailed in my application to Ameritrade, and after my initial funds had cleared in my account, I learned that I had to wait an additional 3 days to be able to place my first $8 trade online. I couldn’t wait that long, I wanted to be a millionaire sooner than that! I called Ameritrade back and asked them if there was any way that I could make a trade now.
“Of course there is, Mr Dinsmore” the gentleman said on the other end. “You can place a broker assisted call with me right now for $18″.
I thought to myself, no problem, what’s $10 when we are talking about millions that I would be making in the next few years, right?
I quickly made my decision to buy right then and there. But what stock was I going to buy? I quickly turned to the phone and asked “my broker” if he had any hot tips on any stocks that were ready to take off. I swear, I think that I had watched to many movies up to that point!
“Oh, I’m sorry Mr. Dinsmore, but it is against our policy to recommend stocks”.
I’m thinking, well what am I paying this guy all of the extra money for then?
Still, it was only $10 more, and I was determined to get started on my journey to become a millionaire that afternoon. I ended my conversation with my broker and headed off to the school library to do some “research” on which tech company I was going to invest in to make my first million!
I logged on to Yahoo.com and immediately saw an article on how well the new Gillette Mach 3 Razor was doing. This wasn’t exactly the “technology” that I was looking for since Gillette had been making razors basically unchanged for over 100 years at the point. Nevertheless, the article talked about how the company was really betting the farm on this new product, and how initial sales data indicated that their investment was about to pay off BIG TIME!!
Well, that was all I needed to read; that’s what I was looking for, the BIG TIME! It didn’t matter that my research for nearly every penny that I had to my name took all of about 30 seconds.
Excited, I ran back to my dorm room to call my “broker” armed with my new ticket to financial nirvana: Ticker Symbol “G”.
After fiddling around with the automated telephone service, I managed to get back on the line with a real person.
“Welcome, to Ameritrade may I have your account number please?” a ladies voice said.
I fumbled for my account # and read it back to her.
“With whom am I speaking with today?” she replied back.
I told her my name and even spelled out my last name for her.
“Mr. Dinsmore, can you give me your mothers maiden name please?” she said in a twangy Southern accent.
For crying out loud, I thought to myself. Sell me some stock already!
“What can we do for you today Mr. Dinsmore?” she said politely.
Finally, now I can get this train rolling.
In my proudest wall street big shot voice I exclaimed “I’d like to buy $1000 dollars worth of “G” please!”
“Of G.E.?” she said back to me.
“No, G for Gillette, you know, the shaving company that just launched the Mach 3 Razor that is getting ready to take off?”
“Oh, OK, wait just one moment please!”
By now the anticipation was killing me, I’d of paid a $100 dollars to get the trade through at that point!
“Hello, Mr Dinsmore?” the lady said back into the phone. “Hang on the line, I’m going to transfer you to our brokerage department”.
“Good grief”, I thought to myself.
“Good afternoon, Mr Dinsmore” came a deep booming voice out of my telephone. “What can we do for you today?”
“Yes sir, I would like to purchase $1000 worth of Gillette, ticker symbol (G).”
“Gillette, OK, well sir it looks like you only have $1000 total in your account, will you be paying the commission out of these funds?”
“Umm, why yes, I guess” I said back unsure of myself.
“OK then, Mr. Dinsmore” he quoted me that day’s price which, if I remember correctly, was around $30 a share. “You can purchase 32 shares of this stock at the current asking price with the funds you currently have available. Would you like me to execute this trade?”
I didn’t want to “execute” anything but if what he meant was “are you ready to get rich” hell ya! “Execute the trade!”
After exchanging brief pleasantries, our conversation ended and I was the proud new owner of 32 shares of the “hottest security traded on the American Stock Exchange”.
Little did I know, the adrenaline rush I just got placing that very trade had was just appetizing a hunger that would later materialize into an insatiable addiction.
Read Part two here.
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{ 5 comments… read them below or add one }
This reminds me so much of my buddies and I when we were in college studying CS doing IPO day-trading that I had to make sure you weren’t one of them. LOL.
Can’t wait to hear the rest and compare notes.
I know I’ve done this exact same thing.
Whoa, nice post – can’t wait for the second part. Call me a cynic, but I get the feeling this isn’t going to end well
None of what you’re describing has anything to do with trading. It’s stuff like this that gave real daytraders a bad name. No professional “daytrader” would be trading anything like what you’ve described or with such little money.
This story is just a description of impulsive idiotic behavior. It could be applied to so many realms, not just trading stocks.
“This story is just a description of impulsive idiotic behavior. It could be applied to so many realms, not just trading stocks.”
Your absolutely right! Hopefully it will prevent other people like myself from making similar mistakes!
Thanks for reading!
ben