General Stock Ideas

[gfp927z]

There are only 2 people I know personally who got rich from stocks. One was a friend's younger brother who worked as a software engineer at Microsoft in the 1980s. The company was not yet the behemoth it became later, and they didn't pay very well, and instead gave out lots of stock options. His were worth ~ $2 mil when he was 28 years old.

Another guy held 4 tech stocks through the 1990s (Cisco, EMC, Network Appliance, and Lucent as I recall). He said he had invested around $150 K, and by the late 1990s they were worth just over $2 mil. I told him he might want to diversify, but later as the tech bubble was bursting he said his 4 holdings were down to $600 K.

None of these were unknown penny stocks. Network Appliance (data storage) was the only non large cap. There are undoubtedly people out there who have gotten rich with microcap and penny stocks, but the odds of doing it seem pretty slim.

There were plenty of 20 baggers over the last 10 years, and many of them were already established solid companies that were severely pummeled in 2000/09 and then recovered and never looked back. What an opportunity to load up on already great companies at a huge discount. As Buffett says, recessions and market crashes are where the best bargains are created.