It was with a serious case of Dow Fever that I walked into Rex Thornton's office.
Rex is a stock broker for the D.A. Davidson Co. He has a cherry wood- paneled office on the bottom floor of the Deseret News building. There is a TV tuned to the business channel in one corner, a computer with graphs and quotes in the other.I know that Rex is a high school football referee, but that can't be the source of the prosperity. Must be the stocks.
I tell Rex that I'm a first-time investor so I'm a little nervous.
"Look!" I say, "the Dow train has been running down the track long enough without me on board."
I can read. I know that three days ago the Dow Jones industrial average chinned itself over the 10,000 bar for the first time. Ten thousand what? I have no idea.
There is a financial guru named Harry Dent who says the Dow will top 34,000 in another eight years. It has climbed from 7,000 to 10,000 in the past two years alone.
Anyone see a trend here? Anyone?
Rex knows about Harry Dent. He has his book on the shelf. He also knows the Dow just keeps going up, up, up. It first went past 1,000 in 1972, 27 years ago. If you had put $10,000 in the 30 Dow stocks back, then it would be worth $300,778 today. That's an average annual return of about 13.5 percent.
Providing you never took any of it out due to panic or to buy a Porsche.
I tell Rex I want in. Before coming to his office I stopped on the fifth floor and asked my investing buddy, outdoor editor Ray Grass, if he wanted in, too. Ray and I have made investments together before. None have ever actually made money. Still, Ray tossed me $50. He too has Dow Fever.
I match his $50.
I tell Rex we want into the Dow for $100.
Well, Rex says, clearing his throat.
He takes a referee's pose. He looks like he's about to explain the rules of offensive holding to somebody from Spain.
First of all, he says, there is no vehicle set up to invest in the 30 Dow stocks collectively.
There is, however, an investment plan for the 10 highest yielding Dow stocks called "Dogs of the Dow." You can do that, he tells me . . .
. . . but for a thousand dollars minimum.
Or we could buy a single stock or get into a mutual fund for five hundred.
For one hundred dollars, however, there isn't much available.
"But," Rex says, "I think Vegas will take it."
For an hour, Rex and I talk market. He talks of the ups and downs, the risks, until soon enough, the conversation turns to what he calls "the high-fliers."
The stocks that ride rockets.
"I had a guy in here last year with $400,000 from his company retirement," Rex says. "He said, 'Let's put it all in eBay.' "
eBay is an Internet stock that came out last fall at $25 a share and then took off for the moon.
"If he'd done that, by Christmas he'd have had $6.6 million," Rex says.
But, of course, he didn't.
He had to be careful, it was his retirement, Rex explains, and besides, his wife was sitting right there.
I thank Rex and leave, the $100 in my pocket is still worth $100.
I stop off at the fifth floor and toss Ray's $50 back at him. "Didn't want us," I tell him. "Didn't make the minimum."
Then I tell him the eBay story.
Suddenly, our investment strategy has changed. Dow Fever has been replaced by eBay fever. We will somehow find $500 and buy eBay.
If this column abruptly stops running anytime in the near future, you will know why.
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