I started investing in college using my trivial savings. Had a acquaintance my age who did the same, but he had access to quite a bit of money for those days.
He had started investing when the Dow was in a deep trough and he picked a few good stocks. He thought he was a genius. You know the line: Never mistake a bull market for brains. LOL!.
He found a computer stock he thought was overpriced at 100X predicted earnings, a firm that had never earned a cent. You know what happened next: It announced a bucket of profits and the stock doubled in a flash. He had borrowed to finance the trade. His portfolio was destroyed although he claimed to have sold in the nick of time.
I learned two vital investing lessons from that. 1) Never short stocks; 2) People lie to hide their investing mistakes. Don't know what else I learned in college around then, but those two lessons were lifetime GOLD.
I suppose, in a way, my friend was correct. His company merged with another one a few years later and I think the successor eventually went out of business. Perfect example of what Buffett's said: Getting the timing right on a short is very difficult. Buffett doesn't short stocks either.
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Because the Good Life is Just a Pump or Two Away
