MONDAY MORNING: My adviser’s a shrink when stock prices sink

As my semiconductor stock tanked to new depths last week, my financial adviser called to check on my emotional well-being.

“Rick,” he said, leaving a voice mail message, “I feel your pain.”

I’m thinking, “Oh, where have I heard this before?”

“But I don’t want you to be pained,” he continued. “I want you to be optimistic. Good days are ahead of us. Clear skies will be above us. It’s a new beginning, Rick. Atmel will come back.”

Yes, Atmel Corp.

Bought it at $18.93 in August. Last week it hit a low of $12.06.

I’m sure many financial advisers were making similar calls. My adviser made the rounds to 30 of his clients to let them vent their frustrations, reassure them that they were not alone, and to find out if they had any money on the sidelines to buy more.

Many, I’m told, sounded punch-drunk. He knows there’s no way to sugarcoat a market that’s killing everybody, so he reviews their portfolios, discusses long-term market fundamentals and employs some stuff he probably learned in Psychology 101.

“Everything will be fine,” my adviser told me soothingly. “I feel badly, because I know you are pained, and I’m troubled by that. So if you want to talk, let me be your financial shrink. I want to be someone you can turn to.”

Indeed, I was in need of some analysis, even if my Nasdaq neurosis was induced by this very adviser when he called me with THE stock to buy.

See, I had just come into a little money. My first order of business was sensible enough: pay off the credit cards and car loan, put a few grand in my son’s Section 529 college fund and invest the max in my Roth IRA. That still left me with a decent sum, and I figured, “Let’s get aggressive.”

I had never owned individual stocks before. I thought that with my financial adviser at the controls, we would make some lightning momentum trades, catch a few rides on some supersonic stocks, and I’d surely double my principal in a year or two. It sounded realistic to him, too.

We had discussed a number of possible stocks. But one morning at the end of August, the game plan changed. Out of nowhere, he told me about Atmel, a San Jose, Calif., semiconductor company with solid earnings projections, a price-earnings ratio under 30 and analyst target prices ranging from $30 to $35.

At that moment, all the wisdom I’d soaked in as a financial writer about the benefits of diversification and dollar cost averaging left me. Whether it was a lapse in judgment or the rush of filling my first buy order I do not know. But before I knew it, on his recommendation, I put all my money on Atmel.

Before he hung up, he said confidently, “Rick, I hope you become rich.” Numb yet exhilarated, all I could think was, “I’m not going to tell my wife.”

At the end of that first day, things were looking good. Atmel up a dollar. By the second day, it was up another buck.

Then I started my slide into a manic market depression.

Every time I punched in the ticker symbol on some Internet site, Atmel’s price was dropping. First Intel Corp., the chip giant, got hammered. Then Sprint Corp. announced a softening in wireless phone sales.

But it all came to a head last week with the Nasdaq down about 39% from its 2000 high and the Philadelphia Semiconductor Index hitting lows not seen since January.

I felt lousy. But it wasn’t until my adviser called that it dawned on me that when I decided to pay for advice, I was also hiring a therapist.

“So again, we need to maintain the course,” he told me. “We’re hoping to see some bottom feeders come in. If we see that, we should see some strength come back into Atmel.”

I feel better already.

Related Topics: Just Thinking