So here is this company that does . . . well, something, my broker’s not sure quite what, but it’s got a sexy symbol — DNA — and it had risen from just under 4 a year ago to 28 last month and 55 a few days ago. I had never heard of this New York Stock Exchange-traded company and neither had my broker. So now he gets a call from a client who wants to buy some. (It’s 77 when he gets the call, up from a low of 64 earlier in the day.)
“What?!” says my broker.
No, he’s not crazy, he says. He wants to buy this stock for his mother.
“Are you crazy?” asks my broker.
No, the guy is perfectly serious. Someone in his office bought 20,000 shares last week at 55. It’s a great stock. It goes up.
There seem to be a lot of stocks like that this year.
Does this make anybody nervous besides me?
My broker said, sorry, he wouldn’t buy DNA at 77 for this guy’s mom. His policy, in fact, is not to be stocks like this for anyone’s mom. Why? Part looking out for their interests, to be sure. But, he laughs, “they’re no lose stocks for these people! Stock goes up, they have a profit! Stock goes down, they’re in court in a wheelchair and respirator saying I recommended it.”
By the end of the day last week when he told me this story (Thursday), DNA had closed at 66-and-change. By the time you read this, it’s likely to be someplace between 40 and 100.
Typically, rising interest rates and pervasive speculation spell trouble in the stock market. Then again, who’s to say the upward climb in rates isn’t over and about to reverse? Or that the speculative frenzy is anywhere near peaking? Or even that DNA isn’t worth far more than 77? Heck, I don’t even know what they do (well, actually, they seem to be a holding company that invests in other companies) — and neither do at least some of the people buying their stock.
Quote of the Day
I don't understand a goddam thing about insurance, except that I don't want to have any.~ex-Harvard Treasurer Paul Cabot
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