Wednesday, October 23, 1996

The Thirteen-Step Recovery
By Cbstd

My name is Scott and I am a trade-aholic. It has been 45 days since my last trade.

It was hard for me at first to trade. I was afraid that it would be complicated, or that the brokerage house would know that I was only an amateur. But my brokerage house made it easy for me, too easy. Online trading and 24-hour hot lines made it simple and tempting to trade. I started small, just a few shares at a time. I bought 25 shares of AMER at $40 per share in the spring of '95 and sold them four days later at a 10% profit. After that I was hooked.

1995 was a crazy year. Virtually every IPO connected to the Internet was an instant winner. And I played them all. It was as if I could do no wrong. Soon I graduated to day-trading and I had gone from odd-lots to 100 share blocks. Sure, I lost money on some of my trades, but the market was so hot that year I could more than cover my losses with my winners. I did not care about commission rates; I was too busy flipping shares. I neglected my family.

I was headed for disaster, and I was blind to the consequences. Fortunately, I was only dangerous to myself. I did not trade and drive.

By the end of May 1996, I was peaking. My portfolio was swollen with hunches and high flyers that would make me rich beyond my wildest dreams. I would follow nearly any tipster and trade on the "come." I was buying on rumors and selling on the news. I had my brokerage's telephone number on my speed dialer.

But my terrific run of luck ran out in the summer of '96. I zigged when the market zagged. All of my gains were washed away by unsound investing practices. I started to trade alone. I used to lie to hide my trading. I had hit rock bottom.

Just when I thought that my life was no longer worth living, I found Fooldom. The first step to recovery was to swear off frequent trading in speculative issues. The next step was to surrender to a higher power, research. Fooldom taught me how to find solid companies with good growth prospects that are presently undervalued. I have learned the joy of holding a security long enough to receive a proxy statement.

With the love and support of my family, I found the courage to scrape together what was left of my trading account and invest in good companies with long-term prospects. The miracle called Fooldom has led me back from the brink of disaster to a complete recovery. I have earned back all of my losses from this summer and my portfolio is poised to break past the peaks of this past May.

But I am here today because I have been tempted, my resolve is weakening. When the market heats up, I get an itch to hit the speed dialer. With a bit of cash in my account, I feel the urge to take a chance on a start-up company that a friend of a friend swears is poised to go through the roof.

With your love and support I know that I can work past this temptation. Stay Foolish.

(Editor's Note: Scott's story is true. It's not intended as a parody of the many fine organizations that offer help to so many people.)

Transmitted: 10/23/96