WANNA GET RICH? DON’T DO AS HE DOES

You’d think after 23 years as a business journalist that I’d know more than the average desk jockey about investing. Your first clue that I don’t should be obvious: I’m still working for a newspaper, not sipping a cold drink in the middle of the afternoon at my villa in Puerto Vallarta, or even vegetating all day on my couch in Strongsville, Ohio.

The fact that I drive a 1991 Chevy Cavalier, buy my ties from a discount drugstore and have resoled the Johnston & Murphy shoes I bought in 1985 three times still doesn’t stop friends and people who learn of my occupation from asking for stock market advice. I safely can say that after two decades as an astute observer of the business scene and occasional dabbler in the market, my counsel remains the same: Do the opposite of what I do.

Please.

I only need to recap my investing miscues of the last 12 months for you to understand why I may be the best reverse market indicator of all time.

Remember late last summer, when worries about possible economic collapses in Russia, Brazil and a big chunk of Southeast Asia caused stock prices to erode? Well, I didn’t panic when stocks took their first major dip in September. However, I can’t say the same after they recovered a bit, only to fall again in early October.

Crain Communications Inc. is a generous employer (and, based on my employment here for 14 years, is proof that you can fool some of the people all of the time). It kicks in healthy contributions each year to an employee profit-sharing plan that since 1996 has allowed each of us to direct our contributions to any of a half-dozen mutual funds.

Until last fall, 60% of my money was planted firmly in various stock funds. Then, on Oct. 8, I changed my portfolio mix to 70% cash, 30% stocks.

My timing was perfect, if you were buying stocks. I wasn’t. That day, the S&P 500 would hit its 15-month low of 923.32. By selling at the bottom, a fat 30% of my portfolio has missed out on the near-50% run-up in the S&P index in the six months since the bull resumed its charge on Wall Street.

think that was dumb?

An isolated incident? Not a chance. Consider my investment in GeoCities, which provides home page space to a few million Internet junkies.

With profit-sharing money from a previous employer, I bought 500 shares of GeoCities at a price of $20 a share in mid-October. In mid-January, I sold the stock for $40 a share.

What’s wrong with doubling your money in three months? Normally, nothing — except when I do it.

A week after I took my profits, GeoCities announced it would be acquired by Internet monolith Yahoo! The stock soared. It was up around $150 a share before falling to around $105.

The coup de grace came a few weeks later, when I took half my profit from GeoCities and put it into USATalks.com, a company developing a long-distance telephone service that transmits calls via the Internet.

The very next morning after I had made my so-called investment, the Securities and Exchange Commission suspended trading in the company’s stock for a two-week period because it questioned the accuracy of information USATalks was releasing to the public.

USATalks is now awash in class-action fraud suits. And my money?

Two-thirds gone.

Now, anybody care for a stock tip?

Mark Dodosh is editor of InvestmentNews sister publication Crain’s Cleveland Business, where this article first appeared.