Money Angles

By Andrew Tobias

With the Dow Jones industrial average trying to break through 3000, how come we're not getting rich? For you, it's just irritating. For me, it's embarrassing. It's my job to get rich (or so I interpret the responsibility). Who wants financial advice from a flounder? I go to the playground after the market closes, and the other kids make fun of me. "How's your Nike?" they laugh, knowing I shorted it at 70, betting it would go down. (It's 89.) "How's ol' Crappy?" they squeal, referring by nickname to a small auto- parts rebuilder I started buying at 7. I bought more last week at 3 3/4.

Do you know what it's like to be billed a "financial wizard" and to have a portfolio of stocks with names like Sleepy, Dopey, Crashful, Crappy? When I'm asked my worst-ever investment, I can't decide. "Choose me!" shout my shares in a company with an asbestos problem. "Choose me!" shouts my ill-fated "TED spread," a bet in May that the unusually narrow spread between Treasury bills and Eurodollars would widen. (It narrowed even further. My cost in brokerage commissions alone was enough to buy a couple of Congressmen.) "Choose me!" shout all my expired-worthless puts and calls.

Money manager Paul Tudor Jones makes money every year -- he made 201% in the crash year 1987 -- so in May I paid special attention when he gave a gloomy interview in Barron's. If Jones thought the Dow was precarious at 2650, so did I. It zoomed, leaving me with my puts and my shorts and my dwarfs.

You've got to be nimble in this game; you've got to be quick.

Chastened, I decided to cut out the lag time between interview and publication. I called Marty Zweig, another market star, who updates his tape- recorded advice daily. The Dow had just closed down 34 points the Friday before Memorial Day, and I wanted to know whether the bear was back. "The market does not go down prior to holidays all that often," Zweig's tape explained, "but when it does, the odds are about 7 out of 8 that the next day will be lower." It shot up 49 points.

If you too have been outsmarted by the market, if talk of all-time record levels in the stock market makes you cranky, don't feel too bad:

-- Not all stocks have been rising, by any means. The advance has been narrow, confined mostly to the blue chips.

-- The gains are not as dramatic as the headlines. Yes, the Dow has jumped from 2669 at the beginning of May to 2961 Friday. But that's just an unlustworthy 7% or so after commissions and taxes.

-- You're not alone. As usual, the market's jump caught most people by surprise. A May 7 Business Week story titled "How Low, Dow Jones?" had one pair of bears answering: 1000. That same day Howard Ruff's newsletter explained that "the momentum chart is very bearish. Every other major stock index has fallen below its longterm optimal moving average, making it nearly impossible for the Dow not to soon follow suit. Watch out below!" Mutual funds were sitting with record amounts of cash. Individuals had sold vast numbers of shares short, anticipating a decline.

That decline is on its way, of course. No market goes up forever. But it will begin the day after most of us decide it won't.

Invest in the stock market, if you have money you can afford to put away for the long term, because over the long term, stocks always outperform safer investments. But do your investing indirectly, through no-load mutual funds. Don't try to guess when children will stop murdering their playmates for Nikes or when overcapacity in the used auto-parts market will be sopped up -- let a pro guess for you. Don't try to be nimble or quick; try to be patient.

I've been saying all that for so long, you'd think by now I'd listen.