The Psychic Investor is bullish on Compaq (CPQ) . But more about that later.
It's a pleasant Tuesday afternoon in Manhattan, and on the 44th floor of one of the World Trade Center towers,
Marcus Goodwin is speaking to two dozen people on the subject of psychic investing.
Now, it's not so strange that a bunch of people might pay to hear a lunchtime lecture about using paranormal powers to invest in the stock market. This is, after all, New York City.
No, what's remarkable is the identity of the organization that is hosting Goodwin's lecture. He's the guest of the
New York Society of Securities Analysts, a 63-year-old Wall Street institution devoted to improving the quality of information available to investors and the competence of investment professionals.
So, down the hall from a meeting room where Drew University students are learning how Wall Street professionals operate, Goodwin is telling a room of attentive, suit-wearing people how they can use tarot cards, candles and pendulums to help pick stocks.
As you might guess, associating psychic investing with the NYSSA is not something that all of its members are pleased about. But the people who have chosen to attend Tuesday's speech are receptive and ready to learn.
Probably one of the first lessons they learn is that to be a psychic investor, you don't need a firm grip on life's little details. The 36-year-old Goodwin, dressed in Armani glasses, a maroon shirt and a peach-colored tie, spends a lot of time in his alloted hour looking among his papers for overhead transparencies he can't find. At least he has a sense of humor about the obvious irony here. Rummaging for a Compaq chart he pulled off of
, he chants, "I am searching for Compaq. I am searching for Compaq. Come to me, oh magic slide."
Another sign that Goodwin is a big-picture guy comes when he reads a passage from his new book,
The Psychic Investor
, in which he quotes a
article dissing the predictive powers of some of Wall Street's most famous market strategists. It appears that Goodwin, whose book jacket claims he has more than 20 years of experience on Wall Street, has no idea who these people are.
"Who," Goodwin reads, "incorrectly predicted a 1000-point drop in the
in May, 1996, when the average was at 5421?"
Byron Wien, or, as Goodwin pronounces it, "Bah-Rone Wine."
"Ween!" shout out several members of the audience. "It's pronounced 'ween'!"
Goodwin moves on to another bad call from 1996. "Elaine..." His voice trails off.
The audience doesn't even wait for him to try. "Garzarelli!" they yell.
OK, so it isn't necessary to have that information in your head to be a good investor. But you'd sort of think you'd pick that up after 20 years on Wall Street.
Hmmm. Thirty-six years old, minus 20, equals ... 16? He was working on Wall Street at age 16? "Uh, no ..." Goodwin says later. "That was the editing people who said that," he says. "I was only on Wall Street ... for about 2 or 3 years."
The Psychic in You
But let's move on to more important stuff. The message of his lecture, and the lesson of his book, is essentially that everyone is psychic.
Goodwin, born Marc Conte, learned about his own psychic powers in a rather dramatic fashion, as he explains in the book. When he was 7 years old, his family moved from the Bensonhurst section of Brooklyn to Las Vegas. It was there that, one day in the desert, a strange man walked up to Marc, addressed him by name without benefit of introduction, and told the boy that the the two of them were "sensitives" who would inherit the earth.
The child later realized that the man in the desert was none other than billionaire Howard Hughes.
Though other people might not learn about their powers from Howard Hughes, they have them, according to Goodwin. It's similar to learning to how to play a musical instrument, he tells the NYSSA gathering. If people take the time, anyone can learn to play, he says. "It's not rocket science."
As Goodwin talks, it also becomes clear that psychic investing, as he practices it, doesn't happen in a vacuum. Sure, he might do a tarot reading for a particular stock. But the former stockbroker (he's pretty sure his Series 7 licensing has lapsed) behaves a lot like a nonpsychic person would. He tries to focus on about 25 or 30 stocks at a time. He reads
. He checks out the relative strength ratings for stocks in
Investor's Business Daily
. It's sort of like the message of that children's story, "Stone Soup": it's easy to make a soup with water and stones, as long as you remember to add some potatoes, chicken, carrots, tomatoes, onions and other vegetables.
Everyone who makes soup has his own preferred recipe; for Goodwin, psychic investing usually starts with tarot cards -- not some medieval deck, but a contemporary edition he bought a few years ago, one that features pictures of stuff like guns and television sets rather than swords and cups.
He does a reading on Compaq.
"I see the young Elvis in the next 30 days," he says.
Goodwin thinks Compaq might make an acquisition soon. He thinks the stock, trading in the high 20s, will move up to 45 in a month or two.
Compaq is one of the five stocks that Goodwin recommends for April. He owns none of them, he says -- he's all in cash at the time of the lecture.
Another predictive tool, Goodwin explains, starts with checking the date a company signed its latest quarterly statements filed with the
Securities and Exchange Commission
. Someone in the audience tells him about someone he knows who worked out horoscopes for companies based on the date they were incorporated.
"That's something I haven't looked at," Goodwin says. "I lean more on SEC data."
'Not a Monster Investor'
So how has Goodwin done with his psychic investments until now? "I have done well," he says later. "I'm not a monster investor. I make enough to make a living." It might seem an obvious career move to stop doing psychic readings for others and just use his powers to invest for himself, but Goodwin knows better. "If I stop doing psychic readings one-on-one, I lose my ability to see anything else, in terms of psychic stock-picking," he says.
Besides, as he makes clear to his audience by reviewing past stock picks he's posted on his
Web site, his predictions aren't flawless. There was, for example, December pick
. His Web site says it was trading at 56 when he picked it, though it traded between 61 3/4 and 67 that day, according to
. Whatever its price that day, the stock slid to the low 40s by the end of the month. "Bang. Right to the toilet," Goodwin says.
Now, to some people, Goodwin's approach makes sense. To others, it's kind of funny and at worst, harmless. Others aren't so amused. D. Kent Freeman, a member of the NYSSA and managing director of
Constellation Financial Management
, wrote the board to say he was disturbed, after seeing a mass email Goodwin sent out to advertise his appearance, that the NYSSA event appeared to confirm Wall Street's acceptance of the legitimacy of his investment techniques, which clearly weren't based on some form of reason or critical thinking.
The NYSSA, apparently not new to controversy, told Freeman it was proud to be a forum for debate, and made no representation concerning the accuracy, completeness or timeliness of information conveyed by speakers at its events.
Another defender of Goodwin was the woman who booked him, Beth Meer, a member of the NYSSA's investment strategy committee. As a supervisory analyst at
Salomon Smith Barney
, Meer explains with a rueful laugh, it's her job to review equity analysts' research of to ensure it abides by the securities industry's rules and regulations. Or as she puts it, "That there's a reasonable basis for everything."
"I think he's intuitive," Meer says. On Wall Street, she adds, there is already a variety of investing approaches: fundamental, technical and quantitative. "He's offering another approach," she says. "Who's to say it's right or wrong? It's different."
"We're certainly not saying that this is how people should go out and make investment decisions," Meer continues. "I'd be the last person on earth who would say that, the absolute last person." But, she says, "I just thought it would be something people would be interested in hearing about."
And they were. As S.F. Accardo, senior vice president at money manager
Melhado Flynn & Associates
and a 30-year veteran of high-tech investing, puts it (and he does look old enough to have been on the Street that long): "Intuition, psychic -- it's all the same. It's just different words."
He continues, "Some of the best money managers are not necessarily high-IQ types. They just have a feel for the market. ... The market is psychologically and emotionally charged. Can you explain these Internet stocks? 1000 times earnings? Is that logical?"
About as logical as Compaq and the young Elvis, one supposes.
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