In 1998, I was 24 years old and working at my first full-time job as a Trust Accountant for CI Mutual Funds. As a trust accountant, it was my responsibility to reconcile several trust accounts by 4pm each day (Snore – I’m amazed that I lasted two years at that job before going back to school to get my MBA). I was a pretty efficient trust accountant, and as a result, I had a fair amount of free time during the work day. After saving some money and opening a brokerage account for the first time in my life, I started trading stocks. This was an exciting time for a “young investor”, as the dotcom bubble was in full expansion mode. Today’s traders following the euphoric rise of marijuana stocks and bitcoin have no idea how incredible that boom was. Sometimes, Internet stocks would go up 100% over the course of just one trading day.
I started off small, investing a couple thousand here and there in some dotcom names. All of a sudden, my couple thousand dollars had grown to over $10,000! One morning, I bought a few thousand dollars’ worth of a company called onsale.com, a competitor at the time to ebay. By lunch time, I had sold my shares, turning $2,000 to $5,000. I was a genius! I told my girlfriend (now my wife) that I was thinking of quitting my job and becoming a day trader. It was so easy and I thought for sure I knew everything. Luckily, she told me not to be such an idiot and to stick with my day job.
Even so, I got bolder and invested $20,000 in AOL.com. You know, the company that mailed out CD ROM’s so you could access dial-up internet. Within four months, my AOL shares were worth $100,000. By the spring of 1999, I was promoted to Supervisor of the Trust Accounting department. However, I knew now that accounting and trust reconciliations weren’t my true calling in life.
1999 was a big year for me: I got engaged, I bought a house after cashing out close to $100,000 of AOL stock and using the money for a down payment, and I went back to school for my MBA. As we all know, timing is everything and as it turns out, I wasn’t a genius, I was just lucky. The remaining internet stocks I owned were worthless within 18 months. Without question, I would have lost all my money had we not bought a house.
Only time will tell if a new breed of young investors will make or lose fortunes trading crypto-currencies, or marijuana stocks, or whatever the next new thing turns out to be. All I know for certain is that those days are well behind me and I will leave that type of “investing” to the “lucky geniuses” of today.