Salon Newsreal | Baby bulls

A L S O T O D A Y
[ M E D I A ]
Greener pastures
By Jenn Shreve
Out of the growing glut of finance mags, one zine is poised to capture the expanding market of young investors

T A B L E+T A L K
The tobacco companies decide to fight back. Is there any hope for a mutually agreeable tobacco settlement? Clear the smoke in Table Talk's Politics area

D A I L Y+Q U O T E
Take this, Uncle Sam!

R E C E N T L Y
White House jumps into Starr "conflict" fray
By Jonathan Broder and Murray Waas
Clinton's lawyer asks Starr to recuse himself from Hale investigation
(04/14/98)
Case closing
By Bruce Shapiro
The Justice Department's "request" that Kenneth Starr investigate his own chief Whitewater witness is one of the last nails in the independent counsel's coffin
(04/13/98)
The other Republican smear
By James C. Hormel Jr.
The son of meatpacking heir James Hormel describes the homophobic campaign waged against his father's nomination as U.S. ambassador to Luxembourg
(04/10/98)
Arkansas trooper considered demanding money from President Clinton
By Murray Waas
Source for Los Angeles Times' "Troopergate" story discussed trading silence about Clinton's private life for hundreds of thousands of dollars
(04/09/98)
See some evil, hear some evil ...
By Gene Lyons
Kenneth Starr says his only concern is the truth. Then why is he giving free passes to people who have lied and broken the law?
(04/08/98)
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baby bulls

YOUNG PEOPLE WITH NO PROFESSIONAL INVESTING EXPERIENCE ARE RIDING HIGH ON THE STOCK MARKET. BUT DO THEY KNOW THAT WHAT GOES UP MUST COME DOWN?
BY HEATHER CHAPLIN | When Robert Gapasin graduated from Cal Poly San Luis Obisbo in 1991, his parents gave him a choice of graduation presents. He could have an all-expense-paid trip to Europe, $5,000 or 100 shares of IBM. Gapasin, who had never been the least bit interested in the stock market, still wonders why he chose IBM.
Bewildered, perhaps, but not regretful. Gapasin, a 29-year-old electrical engineer from San Jose, has since become an avid investor. He buys mostly technology and apparel stock, always in companies that have products he knows firsthand and never with the help of a broker. He's owned Microsoft, Nike and the Gap, as well as lesser known companies, such as KLA-Tenor, and he almost always makes a tidy profit.
Gapasin's success is due to skill but also to an employee stock purchase plan, a 401K plan and one of the greatest bull markets in history. All told, Gapasin has parlayed $5,000 worth of IBM stock into a portfolio worth $100,000.
"This is a pretty unusual time," Gapasin concedes. "Anyone who's not in on it now is crazy."
It's hard not to be seduced by a market that gives someone in their 30s with no professional investing experience 100 percent returns year after year, and Gapasin is by no means the only young person to succumb. As the bull market rolls on, it pulls with it a new breed of investor: men and women under 30 who don't necessarily fit the mold of the sleek Wall Street investor, and who come armed with a new set of expectations and a new investing style. Their expectations are outrageous, formed by years of unprecedented and continuous growth. Their style is aggressive, defined by optimism, impatience and a tendency to trust their gut and ignore their broker.
According to the Investment Company Institute, 45 percent of people aged 18 to 30 invest in the stock market. And why not? While market returns have historically averaged about 8 percent annually, returns the last 15 years have averaged 19 percent. Even after October's 554-point plunge and despite the Asian crisis still hovering over American shores, the Dow Jones industrial average has continued to reach new heights. Just last week, it broke the 8,900 barrier for the first time, and Monday it closed at 9,110. This time last year, the Dow was under 6,500.
For the 45 million people born between 1965 and 1978 -- commonly dubbed Generation X -- the boom market is as much a fact of life as the Cold War was to people coming of age in the 1950s. For high- and middle-income 20-somethings, investing in the stock market is just good sense. More likely to put off child rearing and less concerned about home owning than their middle-class progenitors, Xers are in a position to exploit the opportunities their greater discretionary income affords. And they're doing so with a vengeance. As of 1996, more people between the ages of 18 and 30 were invested in mutual funds than people between the ages of 31 and 50, according to the Investment Company Institute.
Twenty-nine-year-old Ken Kurson has nurtured a lifelong obsession with the stock market. He dropped out of the University of Chicago two years ago to start a 'zine dedicated to the subject called Green. The magazine now has 17,000 subscribers, but Kurson remembers a time when he wasn't so forthcoming about his obsession.
"There's a certain amount of self-consciousness for any ... hipster in admitting they care about making money," Kurson said. But times change, as his very success testifies, and Kurson now finds his generation has caught up with him and perhaps even exceeded him in their enthusiasm. While Kurson believes the influx of young people into the market is good -- fattening their own pocketbooks and providing a boost for the economy -- he does wonder about a generation that's never glimpsed a stagnant or tumbling market.
"Irrational exuberance makes people forget that what comes up, also comes down," he said.
It's a concept young investors pay lip service to, but do they really believe it?
Sarah Ruby, a 27-year-old graphic artist in San Francisco, made her first venture into the stock market four years ago when she bought 50 shares of Electronic Arts, at $20 per share. A year later Ruby sold half the stock, and in February she sold the other half at $39.56 per share, frustrated that her return wasn't higher.
Now, Ruby owns stock in Procter & Gamble, which has grown by more than 50 percent in the year she's had it.
"I guess I don't always realize how amazed I'm supposed to be," Ruby said. "I've never experienced a drop where I get worried. Maybe I've taken it for granted, but it seems like this is just what Proctor & Gamble does -- it just keeps going up and up."
Brian O'Neal, 26, is an electrical engineer in Atlanta who came close to doubling his personal wealth last year. O'Neal developed his serious taste for the market on his own, starting with $2,000 he had squirreled away in college. One of the first stocks he acquired was Coca-Cola Enterprises, which he bought in 1991. He sold quite a bit of the stock over the years, but still made $15,000 when he sold the remaining shares in 1997.
In one breath, O'Neal says the 20 percent annual returns of the last decade can't persist. In the next, he says eagerly that he continues to shoot for 35 percent.
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N E X T+P A G E+| A constitutional right to high return
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ILLUSTRATION BY MICHELLE CHANG

A L S O T O D A Y [ M E D I A ] Greener pastures By Jenn Shreve Out of the growing glut of finance mags, one zine is poised to capture the expanding market of young investors T A B L E+T A L K The tobacco companies decide to fight back. Is there any hope for a mutually agreeable tobacco settlement? Clear the smoke in Table Talk's Politics area D A I L Y+Q U O T E Take this, Uncle Sam! R E C E N T L Y White House jumps into Starr "conflict" fray By Jonathan Broder and Murray Waas Clinton's lawyer asks Starr to recuse himself from Hale investigation (04/14/98) Case closing By Bruce Shapiro The Justice Department's "request" that Kenneth Starr investigate his own chief Whitewater witness is one of the last nails in the independent counsel's coffin (04/13/98) The other Republican smear By James C. Hormel Jr. The son of meatpacking heir James Hormel describes the homophobic campaign waged against his father's nomination as U.S. ambassador to Luxembourg (04/10/98) Arkansas trooper considered demanding money from President Clinton By Murray Waas Source for Los Angeles Times' "Troopergate" story discussed trading silence about Clinton's private life for hundreds of thousands of dollars (04/09/98) See some evil, hear some evil ... By Gene Lyons Kenneth Starr says his only concern is the truth. Then why is he giving free passes to people who have lied and broken the law? (04/08/98) - - - - - - - - - - - - - - - - Browse the Newsreal Archives - - - - - - - - - - - - - - - -
		baby bulls YOUNG PEOPLE WITH NO PROFESSIONAL INVESTING EXPERIENCE ARE RIDING HIGH ON THE STOCK MARKET. BUT DO THEY KNOW THAT WHAT GOES UP MUST COME DOWN? BY HEATHER CHAPLIN \| When Robert Gapasin graduated from Cal Poly San Luis Obisbo in 1991, his parents gave him a choice of graduation presents. He could have an all-expense-paid trip to Europe, $5,000 or 100 shares of IBM. Gapasin, who had never been the least bit interested in the stock market, still wonders why he chose IBM. Bewildered, perhaps, but not regretful. Gapasin, a 29-year-old electrical engineer from San Jose, has since become an avid investor. He buys mostly technology and apparel stock, always in companies that have products he knows firsthand and never with the help of a broker. He's owned Microsoft, Nike and the Gap, as well as lesser known companies, such as KLA-Tenor, and he almost always makes a tidy profit. Gapasin's success is due to skill but also to an employee stock purchase plan, a 401K plan and one of the greatest bull markets in history. All told, Gapasin has parlayed $5,000 worth of IBM stock into a portfolio worth $100,000. "This is a pretty unusual time," Gapasin concedes. "Anyone who's not in on it now is crazy." It's hard not to be seduced by a market that gives someone in their 30s with no professional investing experience 100 percent returns year after year, and Gapasin is by no means the only young person to succumb. As the bull market rolls on, it pulls with it a new breed of investor: men and women under 30 who don't necessarily fit the mold of the sleek Wall Street investor, and who come armed with a new set of expectations and a new investing style. Their expectations are outrageous, formed by years of unprecedented and continuous growth. Their style is aggressive, defined by optimism, impatience and a tendency to trust their gut and ignore their broker. According to the Investment Company Institute, 45 percent of people aged 18 to 30 invest in the stock market. And why not? While market returns have historically averaged about 8 percent annually, returns the last 15 years have averaged 19 percent. Even after October's 554-point plunge and despite the Asian crisis still hovering over American shores, the Dow Jones industrial average has continued to reach new heights. Just last week, it broke the 8,900 barrier for the first time, and Monday it closed at 9,110. This time last year, the Dow was under 6,500. For the 45 million people born between 1965 and 1978 -- commonly dubbed Generation X -- the boom market is as much a fact of life as the Cold War was to people coming of age in the 1950s. For high- and middle-income 20-somethings, investing in the stock market is just good sense. More likely to put off child rearing and less concerned about home owning than their middle-class progenitors, Xers are in a position to exploit the opportunities their greater discretionary income affords. And they're doing so with a vengeance. As of 1996, more people between the ages of 18 and 30 were invested in mutual funds than people between the ages of 31 and 50, according to the Investment Company Institute. Twenty-nine-year-old Ken Kurson has nurtured a lifelong obsession with the stock market. He dropped out of the University of Chicago two years ago to start a 'zine dedicated to the subject called Green. The magazine now has 17,000 subscribers, but Kurson remembers a time when he wasn't so forthcoming about his obsession. "There's a certain amount of self-consciousness for any ... hipster in admitting they care about making money," Kurson said. But times change, as his very success testifies, and Kurson now finds his generation has caught up with him and perhaps even exceeded him in their enthusiasm. While Kurson believes the influx of young people into the market is good -- fattening their own pocketbooks and providing a boost for the economy -- he does wonder about a generation that's never glimpsed a stagnant or tumbling market. "Irrational exuberance makes people forget that what comes up, also comes down," he said. It's a concept young investors pay lip service to, but do they really believe it? Sarah Ruby, a 27-year-old graphic artist in San Francisco, made her first venture into the stock market four years ago when she bought 50 shares of Electronic Arts, at $20 per share. A year later Ruby sold half the stock, and in February she sold the other half at $39.56 per share, frustrated that her return wasn't higher. Now, Ruby owns stock in Procter & Gamble, which has grown by more than 50 percent in the year she's had it. "I guess I don't always realize how amazed I'm supposed to be," Ruby said. "I've never experienced a drop where I get worried. Maybe I've taken it for granted, but it seems like this is just what Proctor & Gamble does -- it just keeps going up and up." Brian O'Neal, 26, is an electrical engineer in Atlanta who came close to doubling his personal wealth last year. O'Neal developed his serious taste for the market on his own, starting with $2,000 he had squirreled away in college. One of the first stocks he acquired was Coca-Cola Enterprises, which he bought in 1991. He sold quite a bit of the stock over the years, but still made $15,000 when he sold the remaining shares in 1997. In one breath, O'Neal says the 20 percent annual returns of the last decade can't persist. In the next, he says eagerly that he continues to shoot for 35 percent. - - - - - - - - - - - - - - - - N E X T+P A G E+\| A constitutional right to high return - - - - - - - - - - - - - - - - ILLUSTRATION BY MICHELLE CHANG