My Stock Exchange Story

My old friend and mentor Babe Paley once said to me, “Al, you can’t be too rich or too thin.” This was before she began to suffer the chronic wasting that was symptomatic of the ovarian cancer that eventually killed her. (It is not true, by the way, that her husband, said, “You can’t be too rich or too unfaithful.”) The point Babe was trying to make was a good one. No one likes a fat poor person. That said, money must be regarded as a means and not an end in itself. In my case, I made the mistake of using money purely as a means to make more money and wound up with no money. Hence, this hurried book. Like many Enron shareholders, I couldn’t have been more excited when the stock climbed from $45, where I bought it, to $67, where I bought some more, to $73, where I cashed in my Keogh plan to put everything I had into the company, to $79, where I took out a second mortgage to buy more nron stock, to $86, where I successfully persuaded my brother and his family, my parents, and my in-laws to invest their life savings in nron quickly before it became overpriced. By the time the stock hit its alltime high at $90.75, I was a millionaire. I had taken a mere eight hundred thousand dollars and turned it into a small fortune, $1.1 million. We were rich! I celebrated by buying my wife a two-hundred-thousand-dollar emerald, which fortunately she made me take back. In fact, I was at the jeweler’s returning the emerald and looking at a more moderately priced ruby tennis bracelet when I received a phone call. “Al, it’s Kenneth Lay over at Enron,” the chairman said in an urgent whisper. “Don’t believe what you hear about the stock.” “I haven’t heard anything about the stock, Ken. What shouldn’t I believe that I haven’t heard?” “It’s just that it’s down a little today,” he replied. “Hang in there.” “Oh, okay,” I said, thinking that maybe I shouldn’t buy the tennis bracelet. “Let me ask you a question, Ken. Are you selling your stock?” “Hell no,” said Lay. “If anything, I’m buying more.” “Would you like to buy mine?” I asked. But the line was dead. You know the rest. A week later the stock was trading at somewhere between a dime and a quarter. Like thousands of Enron shareholders, many of them company employees, I was wiped out. Kenneth Lay, or as my children call him, Kenneth “Lie,” had actually been selling off his stock, and wound up with $150 million, enough to buy a whole emerald mine. But in a way, this was all a blessing in disguise—admittedly, a very good disguise, like they used to use in Mission: Impossible. You see, like most authors I am writing this book because I am in desperate need of money. But unlike most authors, I’m telling you that. Remember the blind British poet John Milton, who wrote Paradise Lost? He didn’t write that book because he was “inspired.” He wrote it because he was wiped out in the Dutch tulip craze of the 1630s. It was ever thus, and ever will be. So you are the beneficiary. Both from the sheer pleasure you’ll get from reading of my misfortune and from the lessons I’ve garnered from the same misfortune.

Lesson One—Be extremely careful with your money. If an investment sounds too good to be true, Kenneth Lay is probably involved.

Lesson Two—Don’t get greedy. Greed works for some people (Kenneth Lay), but not for everyone (Al Franken).

Lesson Three—Diversify your portfolio. Don’t put all your eggs in one basket. So you’ve purchased stock in an Internet portal. Fine. Now invest in an old-fashioned bricks-and-mortar company, like BricksandMortar.com. Lesson Four—Buy gold. In an uncertain world, precious metals retain their value.

Lesson Five—Invest for the long term. After choosing a low-risk investment vehicle like a stock index fund or a rare emerald, do yourself a favor. Don’t even consider touching your investment for five years. Don’t even look at it. The consensus among financial experts is that looking at it is bad luck.

Lesson Six—And this is a biggie. Follow your gut! If you find yourself using a product, invest in it. You see, I wasn’t using Enron, but I was using Bounty towels. Had I made an equivalent investment in Bounty’s manufacturer, Procter & Gamble, I would have reaped a disappointing, but respectable, 3 percent return rather than suffering a 99.8 percent loss.

Although money can’t buy happiness, it can buy certain pills that will make you happy. And financial security, while no guarantee of outright happiness, can at least eliminate the many kinds of unhappiness that come from being financially insecure. Money issues are a flashpoint in many relationships. But remember, a conversation about money is often a conversation about something else. When your spouse asks, “Can I have some money?” what he or she may really be asking is “Do you love me?” Similarly, some disputes that, at first blush, seem to be about something else, may actually be about money. When your spouse says, “Gee, I wish we didn’t have such a shitty car” or “Gee, I wish we didn’t live in such a shitty neighborhood,” what he or she (probably she) may really be saying is: “I wish you made more money, so that we could afford a better car and a better house in a better neighborhood.” Like so many issues that cause suffering between couples (sex, child rearing, professional sports team loyalties), money matters are best resolved through a frank and honest discussion. Plan a family meeting every month to go over your books just as though you were a corporation. Are you spending too much? If so, where can you cut back? Is there anything handy you could pawn? How about that figurine your mother-inlaw gave you? No? Well, what about your fucking golf clubs, then? As you can see, not only will you be having a highly productive financial discussion, but you will teaching your kids valuable lessons about responsible behavior.