What if you had a Time Machine for the Stock Market? Fun, thats what.

Every now and then I hear a story about a guy who got in a stock at the right time and it always makes me shake my head in wonder. I have this cool teacher at school that just so happened to sink a couple of g into amazon in 1997 who is now sitting on quite a bit of money. At the time people were telling him it was a stupid move and to take his money out while he still can. 3 years later people started to shut up about him taking his money out and instead were amazed at his investing genius.
Then I started to think about myself and what I was investing money it in 1997. FFTI. I had a few grand and I decided that I would look at the stock list in Investors Business Daily and find a good solid stock with ratings of 99 98 99 and purchase it and start writing covered calls on it. Sounded like a solid plan. I was pretty stoked about it...stocks that had that kind of rating in the back of IBD were pretty much gold. So I put my money in my account, purchased the stock, and started writing covered calls. The first month I got a 15% return. Pretty solid, I thought. The second month suddenly the stock started to drop. I couldn't write a call because I was below my cost. The third month the stock had an earnings call and suddenly there were a few announcements about thier core operations and the stock started to drop even further. Grimly I watched as the stock suddenly dropped to 50% what I purchased it at and then went out of business, only to have its pieces gobbled up by another company at a fraction of the price.
I then learned that Investors Business Daily and the Wall Street Journal had about as much knowledge about stocks as any other guy on the street. They only had information that was public and were working with information that was released by companies that was carefully looked at before released. FFTI knew that was coming. The only people that were privy to it were officers in the company.
My friend was investing in a finance company whereupon suddenly they were beset by an accounting scandal. Turns out they were keeping two sets of books so the CEO and another officer were personally bleeding the company: building mansions in Florida, cars, personal accounts, and the company was suddenly found to be bankrupt. Even though it was illegal as all hell and the authorities went after the officers of the company, my friend still got screwed with worthless stock notes at pennies on the dollar. To this day? Sorry dude. Investor beware. Everyone that held stock sued and everyone basically ended up with blue note (IOU) certificates that paid almost nothing.
This is why I tend not to own stock or options for more than 3 weeks. If I did invest, I would try to be like Warren Buffet and invest for the long term..decades. Instead, I invest between a window of 3 days to 3 weeks only due to this chaotic uncertainty. How could you really ever get in bed with a stock without really being able to do an in depth background check and find out information that only truly an officer of a company would know? Such as really knowing what is going on with WorldCom or Enron in 1999? Millions of investors lost money. Some their life savings. Never put it all in one basket. This is why I like the QQQ or other indexes, such as SPY. They are a mixture of lots of different stocks..
So every now and then while I am waiting for something big to go down in the market (such as the drop thats about to happen) I like to play the time machine game. If I had a time machine, what stocks would I go back and purchase and when? For this game, we will need one simple tool here in 2015: hindsight. And we will be using yahoo finance and its chart plotting widget.

Yup. Looks like my teacher was in the right place at the right time with Amazon in 1997.

THE MAIN THING YOU SHOULD DO IF YOU TIME TRAVEL 

There are two time points you should be aware of: 1986 and 1997. The first will require that you have 2 thousand dollars to invest in 1986. So lets say that you go back to 1981 and you are say, 12 years old. Time to start hustling, kid. Start mowing lawns, and start carrying golf bags for middle aged guys wearing bad plaid golf pants. Start saving that birthday and bar mitzvah money. Because you have a couple of years to come up with 2-3 grand which shouldn't be that hard. I knew one guy who was double bagging 18 holes as a caddy earning about 60-100 dollars a day as a caddy in the early 90s. That figure due to inflation will probably be 30-60 dollars a day in the early 80s, but that will do. Get out there and hustle.
Microsoft had their IPO in March 1986. I remember being on a college tour while I was looking for the college I was going to attend in spring '86 and when I was looking in one of the laundry rooms there was a tech magazine with a young guy on the cover: Bill Gates. He was about 26 years old and how he had big plans. Just another geeky tech guy I thought. Had no way of knowing that his operating system would take over the planet. What did I know. Well the second time through with my time machine, I now know everything. So this is what to do when you are looking around for this stuff. Go to Yahoo Finance, type in the ticker symbol of the stock you want to look at and then on the left column look under charts, where it says 'interactive'. Click that.
Right above the stockchart there will be things you can click like 1 day, 5 day, 1 month, etc. Click 'Max'. This will display the stock growth from the beginning of its IPO until the present day. It will also display the price and percentage change adjusted for its current stock price after splits, etc. So take your mouse and hover it over the chart without clicking and you can see that the interactive chart as you move the mouse will go like an x-y axis and display price at whatever time you hover over.
As you move all the way back to the beginning, it will adjust the stockprice in relation to the stock price as it is now after splits, dividends, etc, so even though say Microsoft had an IPO price of 21 dollars per share, it had split 9 times, so looking at the chart you will see that it on the chart has an adjusted starting price of .089 per share. Adjusted, that's like a micro penny stock.. now drag the mouse on over to its peak in Dec 99 and you can see that the interactive widget chart says that the stock has grown 61,347% since its IPO. That would mean whatever money you put in during that first day of trading, multiply it by sixty one thousand three hundred forty seven percent for a stupidfying return rate. Now grant you when you were 18 like I was you were just concerned about going out with your friends and scraping together some gas money for your car and going to concerts. But that's what the time machine is for. We purchase in this example, $2000 dollars of Microsoft stock on its IPO date in March 1986.
The second stock that we are going to Parlay this with is Amazon. Amazon had its IPO in April 1997, so we are going to have to sell our Microsoft stock before the peak in '99 in order to be ready to plug the money into Amazon. Remember, after 1999 Microsoft's main growing period was over, and things just kind of walked sideways through the two stock market meltdowns of the 2000's. Amazon on the other had had one of the largest growth periods in IPO history.
So we would exit Microsoft in April 1997 with a 15, 887% return. Lets plug our $2,000 dollars into that: After holding Microsoft for 11 years while it takes over the planet we now have in our trading account $316,000. Not too shabby. But the magic is just beginning. We roll our 316 grand into Amazon where we get in at 23 dollars per share at the end of the trading day. Here is an article about the first trading day of amazon. We then hold amazon until its current peak (as of this writing) at Dec 2013, where we have a return since inception of 26,486%. We then do the math with our $316,000 and we now have $83,424,000. MSFT (1986) [2,000]>AMZN(1997)[316000]=83424000.
Hindsight is easy. Building a time machine is hard.
Makes me think of how I would have lived with that kind of money, how hard I would have partied. Better yet, what kind of things could I have accomplished freed from the banal constraints of being forced to work for my nut 8-10 hours a day? Not only are you working towards these hours, but additional hours of your day are also requisitioned toward support for these main work hours that you are actually working. You have to factor in travel to and from work. Getting ready in the morning.

Sleeping early so that you can get up in the morning. Looking at it, it almost gets to 11 hours a day. Being feed from this can let you go up higher on the self realization ladder to do the things that will make you a better person (in theory) rather than doing the things you have to in order to survive, to support your Maslownian hierarchy of needs. Looking at the hierarchy people are lucky enough to reach the love/belonging level, and few go above. Where are you on the above chart, and what can you do to climb higher?
For most people this involved the freeing factor, money. Money increases options and opens channels, freeing you to work on your higher levels.
Time Travel would sure be a great way to kick that in high gear. Just be careful when the time police come after you.

Keep the safety off,
Mark