burned by internet stocks

So when I was in my 20s, working in New Hampshire, I worked my butt off and eventually got on staff at the statewide paper there. This was the first time I was making any money — it was a pretty good salary for someone my age, living in a low cost-of-living state.

One of the things I did with the increased salary was to … buy Internet stocks. AOL, AMZN, YHOO, EBAY, TWX, CNET, ET, CMGI … Well, at least it was the blue-chip Internet stocks. I bought stocks on margin and saw them double in value within days. I had three Internet brokerage accounts and was addicted to CNBC.

In roughly a year my initial investment of about $5,000 (or was it $10,000?) hit a high of about $25,000. I couldn’t wait for all of it to double again! I remember dancing around my kitchen in excitement …

Of course, as you all know, it didn’t quite work that way. I think I broke about even or made a slight gain on my largest position, AOL. But the rest of it — not so much.

I had bought 10 shares of CMGI stock for about $1,000 … when I sold them they was worth about $5. I actually owed my broker money after the sale, since the commission was $8 or $12.

I still have 20 shares of CNET, worth $181.60, or $1,100.89 less than what I paid for it nearly a decade ago …

Yeah. Not so smart.

But I also made another move that has paid off. This is the one you should take my advice on. More on that tomorrow.