At Large
Try, try again
By Doug Cabral - July 19, 2007
In 1987, transported by a master of the universe illusion, Beau bought shares of Adobe Corporation. He worked at a place that had recently installed computer equipment running Adobe software. At the time, Hummer was in the publishing business, and he thought the Adobe applications were very clever and saved him hours of painstaking work with a sharp knife and hot wax.
Other people in enterprises across the United States found themselves as impressed with Adobe's performance as Beau was. Adobe's stock price rose rapidly and high. When Beau sold, he cleared two grand.
Having had the brilliance of his luminous self-image confirmed, Beau bought some Genzyme, a Massachusetts bio-tech company with a bright future. Genzyme's share price also rose, but not so quickly, so Beau sold and accepted a modest gain. He decided the future lay in tech but not necessarily bio-tech.
Beau was liking this investing action. He realized he had a gift. He left the publishing business, got into house carpentry. He thought he had a gift for carpentry, too - plus the hours were more flexible.
A child of the fifties who fell hard for the girls on American Bandstand, Beau bought Dick Clark when the impresario went public, but it was a bum stock. Apparently Clark was over, although he didn't know it, and although Beau had a hard time believing it. He got out of Dick Clark almost whole. He was slightly disappointed, but he had formed an abiding enthusiasm for the excitement and potential of initial public offerings.
Before long, Beau was out on his own in the building business, but he wasn't doing much building. He'd meet the crew at the Black Dog each morning early, dispatch them to the job sites, then head for his computer. In the mid-nineties, living in a Vineyard Haven apartment over a restaurant, he converted the dining room into an office. Calendars promoting building materials hung on the walls. Pretty girls in hard hats and bikinis decorated piles of lumber, air compressors, and galvanized fasteners. They posed blowing imaginary smoke from the business ends of pneumatic nailers. The calendars mostly displayed long-ago months.
Beau's desk was littered with confirmation slips. He was still trading stocks, but he was into options too. The slips covered the building materials catalogues and marked the pages in which months ago Beau had been searching for windows or doors or specialized moldings. Now, his girlfriend did the construction research, the pricing, the estimating, and the billing. There were trade confirmation slips on the floor and on the chairs. Beau had become a trader-slash-homebuilder, with the emphasis on trader.
He was long on coms, dot-coms and telecoms. He was in and out, a quick hitter. Most of the companies he bought had no earnings. Doesn't matter, Beau said, it's all about momentum. Don't talk to me about balance sheets. It's the big Mo that matters. Stock's going up, gotta go with it. Beau was taking the ride of his life. Banging nails couldn't touch it. He rode the wave through the 90s.
When the wave tossed him up on the shore, Beau was very disappointed. He was also angry, furious really, with the CEOs and the CFOs that had been cooking the books and booking the chimerical profits, riding the big Mo while he was riding the wave, and getting rich, which hadn't quite happened for him. But Beau, weren't they inflating the profits and disguising the debt when the share prices were rising and you were delighted, you and the executives who were cashing in their options just like you were, albeit on a much greater scale?
Maybe, Beau says, but they lied to me and everyone else, and that's why I'm getting out of the market. You can't trust big corporations. These executives have to be punished, and they ought to go to a real jail, not some country club.
Beau has picked up the tattered threads of his carpentry career. He's flipped the pages of the building supply calendars. He's swept up the confirmation slips that carpeted his home office. He's said a reluctant goodbye to his girlfriend, though she says she broke up with him. He's mortgaged some Aquinnah property to pay his margin call. He knows who is to blame for the fix he's in, and he wants them to hurt the way he is hurting.
Angry, bruised, hurt, sure, but Beau is no quitter. He says he has some ideas about what to do next. And, it's not carpentry. Real estate is where it's at right now, he says. Prices are down, foreclosures are up, the market is still eager for Vineyard property. According to Beau's analysis, real estate is probably the best place to be for a while. He has his eye on some Chilmark property. He says that even though large scale development is not happening any more, the window is open for a couple of upscale spec houses, McMansions but with a splash of green. Tack on a wind turbine, and the plans will ooze right by the regulators. There's money to be made by someone who doesn't mind a little risk. Because the prices are going to start rising. To Beau, it's all about the big Mo.
