Friday, November 15, 1996
From 42nd Street to Wall Street
or
My Best Dumbest Investment
by MF Cormend

My dumbest investment ever was also easily my best investment ever. It threw me for a 100% loss in less than an hour. It humiliated me and angered me. But it taught me a lesson that has saved me the amount of that loss a thousand times over.

The tale begins nearly twenty years ago, during a summer break from college. While staying at a relative's house in Manhattan, a friend and I toured the infamous Times Square section of New York, complete with bright neon lights, sleazy bookstores, and incredibly cheap Rollex (sic) watches for sale on the street.

We were young, we were free, and we were hip. We were also curious at the crowd gathered right there on 42nd street. A man with a makeshift table was sitting there, moving three cards around furiously, challenging spectators to guess which of the three face-down cards was the red queen, the other two cards being black queens.

"FIND THE RED QUEEN, WHERE'S THAT RED GIRL? NOW YOU SEE IT, WHERE'D SHE GO? HOW MUCH CAN YOU WIN? TEN WILL GET YOU TWENTY!"

We were hypnotized by the movement of the cards, the crowd and the patter. Cash was flying down on the table. The first few wagers were losing ones; the chosen card was not the coveted RED QUEEN. We, along with the losing bettors, couldn't believe it when the card turned up BLACK. We had followed it closely and were simply wrong.

Then a subtle change in the game occurred. As we watched longer, not only were we starting to be right more frequently, so were many in the crowd. Tens, twenties and at one point, even fifty-dollar bills were wagered and, even more incredibly, many in the crowd were WINNING! The card shuffler was beginning to give himself away; we had caught on!

I glanced sideways at my friend at almost the same time he glanced at me. How much do we have? As poor college students, we had about twenty-five dollars between us, a good chunk of change for us at the time. Why not? We were on to the game and were guessing right now nearly every time. In fact the dealer was now getting somewhat angry at his rapidly growing losses and was threatening to leave.

Down on the table I slammed our two ten-dollar bills. LET'S GO! Those three cards were moving in and out, up and around, all the time we both were keeping rapt mental attention on that Red Queen. Finally the dealer stopped, and asked, "OK, WHERE'S THE RED GIRL?" As fast as we could, both my friend and I excitedly pointed to the same card in the middle. There could be no doubt in the world that the middle card was our ticket to a fast twenty bucks.

Well, readers, of course you know the sad ending to our story. That middle card was black, not red. Our erstwhile fortune was now in our host's pocket and we stood there, simply stunned. To cap off the shock, immediately thereafter a whistle blew from half a block away, and no less than ten of the active spectators in the crowd took off on a mad dash down a nearby alley, folding table in hand.

Yes, we were naive. We were ashamed. And we were nearly broke. But to this day I've never forgotten that infamous game of what I now know is called "Three-Card Monty." Whenever I see that sure thing, that "can't miss" prospect, that GUARANTEED investment pitch, I hearken back to those days of lost innocence, and staunchly refuse to be a player.

Oil well tax shelters, anyone? Soybean options? The latest sector mutual fund that gained 125% last year? They're nothing but black queens to me.

Transmitted: 11/15/96