The hope among the “sophisticated buyers” was that one bank picking up coverage would lead to others doing the It didn’t have enough brokers to shout out the marketing spiel to entice enough new buyers to pay the oldīuyers. Unfortunately, the bank couldn’t attract enough new money to the stock to sustain its The bank made up forecasts formulating revenue numbers at monstrous growth rates that at some point in the future Huge market caps, so this company looks cheap. Only maintained X percentage of the market, they would grow to some big number. They reiterated all the marketing mishmash that was fun to talk about when the stock was aĭollar. To add to the volume, a mid-sized investment bank that specialized in technology companies came out with a buy People wereīuying the stock because other people were buying the stock. Market value was close to $1 billion – which in those days was real money. To the competition, it was reasonably valued on a price-sales or price-earnings basis. I bought the stock, I answered the questions, and I watched Gandalf climb from a dollar to about $20 a share overĪt a dollar, I could make an argument that Gandalf could be attractive.
The market size, the competition, the growth rates. Sure, I’ll buy some, and I would be happy to answer any questions about the
It had competition, but the market was new and they had as What did I think about Gandalf Technologies? It was trading at the time atĪbout a buck a share. I had no idea Gandalf was even a public company until aįriend of Raleigh’s asked me about it. They hadĭecent results, nothing spectacular, but good enough. I had bought one for my house and liked the product, and I’d talked to other people who’d used it. Gandalf made Ethernetīridges that allowed businesses and homes to connect to the Internet and each other via high-speed digital phone lines I remember buying stock in a Canadian company called Gandalf Technologies in the early 90s. Of course as the stocks moved, the number of people wanting to talk to me grew. Yet after hanging up the phone with these people, I would watch stocks move up and down. We talked about things that really amounted to the things you would hear if you attended any industry trade show panel. We talked about who was winning, and who was losing. We talked about what companies were stuffing channels – selling more equipment to their distributors than the distributors really needed to meet the retail demand. We talked about token ring topologies that didn’t work on 10BaseT. As we started buying and selling technology stocks, most of which were in the local area networking field that I had specialized in at MicroSolutions, Raleigh put me on the phone with analysts, money managers, individual investors, reporters, anyone with money or influence who wanted to talk technology and stocks.
As we got ready to start, I asked Raleigh if he had any words of wisdom that I should remember. Someone like me with industry knowledge had an advantage. The reason I was ready to try was that it was patently obvious that the market wasn’t efficient. Finally after more than a year, I relented. He finally broke me down to start using this information to my advantage to make some money in the market. Yet I saw Raleigh using the information I gave him to make money for his clients. I truly thought that the markets were efficient, that any available knowledge about a company was already reflected in its stock price.
After all, I had read A Random Walk Down Wall Street in college. I couldn’t believe that I would have an advantage in the market. How these companies were marketed, and whether or not they were or would be successful. I knew which had products that worked, didn’t work, were selling or not. Synoptics, Wellfleet, NetWorth, Lotus, Novell and others. Because of my experience at MicroSolutions, I knew the products and companies that were hot. I trusted Raleigh, and he put me in bonds, dividend-paying utilities and blue chips, just as I asked.ĭuring that year, Raleigh began asking me a lot of questions about technology. As we planned my financial future, I made it clear that I wanted my nest egg to be invested not like I was 30 years old, but as if I were 60 years old. But we hit it off very well and I trusted him. Raleigh was in his late 20s, and relatively new to Goldman. I set about interviewing stockbrokers and settled upon a broker from Goldman Sachs, Raleigh Ralls. That was going to be my nest egg, and my goal was to protect it at all costs, and grow it wisely. After taxes, I walked away with about $2 million. In 1990, I sold my company, MicroSolutions which specialized in what at the time was the relatively new business of helping companies network their computer equipment to CompuServe. The Number.I recommend that anyone with an interest in the market jump at the chance to buy it. So I decided to look back and pull out one of my first blog posts, from 2004.
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