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Bet it all on black...
Old 09-21-2010, 10:42 AM   #1
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Bet it all on black...

Here is an interesting story of a "professional" investment adviser who put his daughter's entire college fund in one option...

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[Michael Murphy,the editor of an investment advisory service called New World Investor] invested his daughter’s entire college fund in just one option—the Jan. $10 calls on Arena Pharmaceuticals (ARNA 1.87, +0.01, +0.50%) .

Upon hearing the news of what Murphy had done in her college fund, she reportedly instructed him “to get brochures on Harvard and Stanford.”

Those applications might have to be put on hold: The Arena call options Murphy bought are now worth about 90% less than where they stood last Wednesday evening.
I suppose his daughter is actually getting an excellent eduction - in why it is so important to diversify.

Adviser goes for broke
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Old 09-21-2010, 10:46 AM   #2
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another lesson someone could learn about this - a bulk of these people writing these newsletters and "advising" don't really know what they are talking about.

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Murphy, of course, is the editor of an investment advisory service called New World Investor.
go to see one of them at least put their money where their mouth is...
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Old 09-21-2010, 11:13 AM   #3
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Originally Posted by REWahoo View Post
Here is an interesting story of a "professional" investment adviser who put his daughter's entire college fund in one option...

I suppose his daughter is actually getting an excellent eduction - in why it is so important to diversify.

Adviser goes for broke
Down 90%? Those options must really be a good deal now!

Ha
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Old 09-21-2010, 11:22 AM   #4
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I'm going to assume that the college fund contains $10 and that he'll be paying for her education out of his "general wealth" pile, which he will accumulate by selling many copies of his newsletter, sales helped by excellent publicity stunts such as this one.
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Old 09-21-2010, 11:41 AM   #5
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Community college, here we come...
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 09-21-2010, 12:00 PM   #6
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Community college, here we come...

Working her way through with a job in mortgage re-fi?
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Old 09-21-2010, 12:30 PM   #7
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I suppose his daughter is actually getting an excellent eduction - in why it is so important to diversify.
Funny I thought the lesson she would learn is that being a member of the right sperm club matters: both in terms of inheritance of brains as well as wealth.

And based upon her father's actions, it looks bad on both fronts for her...
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Old 09-21-2010, 05:35 PM   #8
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Mr. Murphy has been around the investment newsletter business for quite some time. He has a colorful past.

Money Magazine Archive
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Old 09-21-2010, 07:05 PM   #9
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You just have to appreciate someone who drinks the cool aid and they mixed it themselves.
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Old 09-21-2010, 08:58 PM   #10
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His 7 year old daughter understands about options and upper tiers schools like Stanford and Harvard? I don't think so.
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Old 09-21-2010, 09:57 PM   #11
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This guy seems to be in the "enough monkeys at typewriters" game:

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And Murphy has done many things right. His service was the second-best in 2009, for example, among the nearly 200 rated by the Hulbert Financial Digest (HFD), with a gain of 148.5%.

Over longer periods, however, Murphy’s missteps have led his service to lag the market. For the decade through Aug. 31, for example, the HFD calculates that it produced a 0.5% annualized loss, in contrast to a 2.1% annualized gain for the stock market as a whole (as measured by the Wilshire 5000 index

I don't buy that he has 'done many things right'. He probably has done many things, some of which turned out to be right sometimes.

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Old 09-21-2010, 10:11 PM   #12
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His daughter is only 7? This sounds like a publicity stunt. Plenty of time to recoup.
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