Tapes & Transcripts _ Betting on the Market _ FRONTLINE _ PBS

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BETTING ON THE MARKET

FINAL Credits

As of January 27, 1997 10:22 AM

[This transcript is provided as a service of Journal Graphics. The WGBHEducational Foundation is not responsible for any errors or mischaracterizations in this transcript. JES]

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FRONTLINE Show #1506Air Date: January 14, 1997

Betting on the Market

JAMES CRAMER , Money Manager: It's the most objective

industry in the world. If your numbers stink, you're out. If your numbers are good, you get more money. It's the mostDarwinian. It's beautiful. It 's brutal. It works.

All right, guys. Let's roll. Buy 5 HMTT at an eighth. Seewhat happens. It's against puts. We're fine. I want to see if you can even buy it. Colgate opens up an eighth.

IBM... August, '95 calls? I want an offering on a thousand. Iwant an offering on a thousand! I want an offering on athousand! Yes! Double down. Double down. I want ten... Iwant a thousand!

MANAGER: Pfizer, 17-and-a-quarter. It's X. We get thedividends.

JAMES CRAMER: Sold!

JOE NOCERA: A new faith is sweeping the country, gatheringstrength by the day.

JAMES CRAMER: It's 25. It's 25! Okay? It's 25!

JOE NOCERA: Over the years, as a financial reporter, I'vewatched money manager Jim Cramer turn into one of the

market's most avid missionaries.

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& Transcripts | Betting On The Market | FRONTLINE | PBS http://www.pbs.org/wgbh/pages/frontline/shows/betting/etal/s

8 10/2/2012



JAMES CRAMER: Colgate, Colgate, Colgate! Get me, get me,

get me!

There are a thousand stocks out there that could make yourich totally independent of what you do for a living, all right?If you had bought Merck in the 1950s, just bought 10,000

shares of Merck instead of buying U.S. Savings Bonds, youwould not ever have to work again.

Forty-six-and-three-quarter bid Cascade!

I believe that stocks like Bristol-Meyers, had they existed100 years ago, there would have been no Marx. There would

have been no communism because what's happened is thesestocks have made many millions of people rich and they'regoing to do it again.

Sold!

JOE NOCERA: Take a look around. We've all become hookedon the stock market.

1st INVESTOR: Within about 14 months, made about 30 percent, 40 percent of my money.

2nd INVESTOR: I'm up 35 percent in three months.

3rd INVESTOR: Yeah. I mean, I did 178 percent last year, soI'm doing well. I really enjoy it.

JAMES GRANT: The 1996-model stock market is the mostoverwrought, over-excited thyroid case, if you will, we'veever seen in this country.

RON CHERNOW: We're now using the stock exchange as akind of souped-up, turbo-charged national piggy bank andretirement plan.

DIANA HENRIQUES: People are in the market today becausethey're afraid not to be in the market and this represents atremendous change in the psyche of the country.

MANAGER: Okay, you want to pay 52 for 4,300 GeneralMills? That's for W.D., right? I gotcha, baby.

JOE NOCERA: For most of this century the stock market

belonged to insiders, men who spoke in a coded languageand worked in the arena we call Wall Street. But today thestock market belongs to all of us. During a bull market that's

lasted 14 years, a time that's seen the Dow-Jones Industrialaverage rise more than 5,000 points, tens of millions of Americans have become investors. There's never beenanything like it.

4th INVESTOR: I can make twice as much money in the stock market as working real hard in my regular business and so Ithink it's an opportunity. And it's cleaner. It's less people. It'syour brain and how much time you want to put into it.


8 10/2/2012



JORDAN GOODMAN, "Money" Magazine: There's a feeling,

like, "Everybody's making all this money on Wall Street.How do I get in on the action?"

JAMES GRANT, "Grant's Interest Rate Observer": I have anoffice on Wall Street. I look out the window and I can see

people queued up to visit the stock exchange, to kind of goin in the visitors' gallery and watch their wealth fructify.They want to go in there and watch the stocks go up. It's likethey're visiting some French cathedral. They're out theretaking pictures in front of this building, this Mecca.

JOE NOCERA: Wall Street is one of the great symbols of thefree market, but it's always been something most of us fearedrather than embraced. That's what's changed. Today'smarket, we believe, is there for us, helping to send our kids

to college or to provide our retirement nest egg or to makeour lives better in 100 different ways.

5th INVESTOR: This is corporate America at its finest, wherethe little guy gets to go in and buy a piece of Walgreen's and

be co-owners with all the rest of the Walgreens, Charles andall those very nice people. And we are part owners. We're

not gamblers.

RADIO TALK SHOW HOST: Good morning, everybody. This isGary Goldberg on Money Matters. Welcome to the program.

And we are here to...

JOE NOCERA: Today everybody's a part owner.

RADIO TALK SHOW HOST: ...because for the first time many

of you have decided to invest and...

JOE NOCERA: And they all want to talk about it.

RADIO TALK SHOW HOST: Hello, Sharon. Good morning.

CALLER: Hi. Thanks for taking my call.

RADIO TALK SHOW HOST: You're welcome.

CALLER: We currently have most of our savings invested inthe stock market. We're investing, making a profit and sellingit so we can pay off our credit cards, set up retirement andthe college for the children.

JOE NOCERA: We found Sharon and her family in upstate New York. They are modern American investors.

SHARON GORNIE: We don't have any retirement, owning our own business. That's why we're in the stock market. We'retrying to make some aggressive money very quickly. Russ

works very hard. It's almost demeaning that he works this physically hard. It should be more mental.

INTERVIEWER: How much of your savings are in the marketright now? How much of your life's savings?


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RUSS GORNIE: Almost all of it.

INTERVIEWER: Almost all of it?

RUSS GORNIE: Almost all of it, yeah.

TELEVISION REPORTER: The whole industry continuesriding high, but there are some clouds on the horizon.

SHARON GORNIE: Gee, IBM's 95 and I see Nike went up to

108, also. I could sit here all day and watch this and justwatch them go up and up.

Guys, come on! One hundred and eleven and seven eighths...

down two and five eighths. It was one twenty-five. I guesseverything's still falling.

Russ started watching CNBC and I put it on at the carpetstore. I just put it on one day and I just watched thetickertape go by. The stocks were going crazy. Some of themwere starting at $10 and going to $80 a share.

RUSS GORNIE: Something like Microsoft, I mean, you...when I first started watching it, I think it was almost $50 ashare. What was that, about a year and a half, two yearsago? And you sit there and watch that stock go up to $120.You know, you get kind of giddy about it.

SHARON GORNIE: What kind of stock do we have?

CHILD: Microsoft.

SHARON GORNIE: Yeah? What are those... what are the call

letters?

CHILD: MSFT.

SHARON GORNIE: MSFT.

If you look at the stock market, the overall, when it started back 100 years ago, the stock market was here. It's 1996 andit's up here. And it's gone up and down, but eventually it hasended on the up.

JOE NOCERA: Sharon and Russ live in a small and modesthouse, but they have big plans.

SHARON GORNIE: This is our dream house. Look, here's the plans inside. This is where we're going to live, in the back.There's a nice big "great room." It's got an arch window upthe stairs. We all picked out our own bedrooms. We look at itwhen we're off to work in the morning and when we comehome tired. It's just like an incentive. Isn't that beautiful?Isn't that nice?

JOE NOCERA: The investment industry has aggressivelycourted baby boomers like Russ and Sharon and no part of the industry has been more aggressive and more successfulthan the mutual funds, which offer people the alluring


8 10/2/2012



prospect of handing over their money to an expert, a fund

manager, and watching him make dazzling gains.3

JORDAN GOODMAN: Eighty-five percent of the money nowin mutual funds has come in since 1990. So far, in 1996,we've had more money come in, into stock mutual funds,than in any previous year in history.

CONFERENCE SPEAKER: Good morning and welcome toanother mutual fund conference. It 's a pleasure to see somany familiar faces and welcome you back. A littleconcerned about the beautiful nature of this room and can'thelp but wonder what that tells you about where we are inthe market cycle.

JOE NOCERA: By the spring of 1996, when we attended thismutual fund conference, the fund industry had topped the $3

trillion mark. That's more than the gross national product of France or Germany. And much of that money has streamedin in just the last three years as the market has made some of

its most spectacular gains.

DIANA HENRIQUES, Author, "Fidelity's World": There are7,000 individual mutual funds. There are 400 mutual fund

families, all with their product wares spread out for you.There are bond funds. There are emerging market funds.There are Canadian resource funds. And if you want toinvest in something and you can't find a fund for it, wait 15minutes and someone will devise a fund to sell to you.

1st SALESMAN: Well, we have 15 no-load mutual funds, theemerging growth fund, capital appreciation fund...

1st SALESWOMAN: We don't invest in companies involved inthe manufacture of weapons or the production of nuclear

energy.

1st SALESMAN: ...value fund, growth and income fund...

2nd SALESMAN: We generally tend to pick stocks that pop up

on our buy list as a result of our computer screens.

1st SALESMAN: ...government fund, money market fund andreserve fund.

JOE NOCERA: I have to ask you. I've never heard this before.I've never heard of anybody with a Nebraska tax-free fund.

3rd SALESMAN: Well, it's both federally and state tax-freeand invests in municipal bonds.

JOE NOCERA: But you got... you have to live in Nebraska toget this, right?

3rd SALESMAN: That's right.

JOE NOCERA: Is it just our imagination, or do these funds allseem to do nothing but go up?

2nd SALESWOMAN: The small-cap fund, which is directly


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correlated to our managed accounts, is up 36 percent.

4th SALESMAN: It was up 20.41 percent.

5th SALESMAN: Last year it was up about 59 percent.

JOE NOCERA: A thousand percent or something?

2nd SALESMAN: I don't know if it's that much, but it wouldcertainly approximate that.

JOE NOCERA: And the better these funds do, the more the people who run them seem like superstars.

JIM CRAMER: Five years from I think you'll be able to name

the top 25 mutual fund managers in the country in the waythat you'll be able to say who runs IBM and who runs FordMotor and who runs Chrysler.

JORDAN GOODMAN: There's a tremendous pressure on themutual fund managers to get the top performance on aquarterly basis, certainly on an annual basis, because if they

don't, they'll lose their shareholders. They might even getfired. Yet if they do very well, they can become verywealthy very young.

JOE NOCERA: The competition is fierce and the top mutualfund managers are like modern-day alchemists, creatingmagical market gains. And right now no one has the goldentouch more than this man, Garrett Van Wagoner, who runs a

one-man shop out of San Francisco.

GARRETT VAN WAGONER: That's... then that's my final offer.

JOE NOCERA: Dozens of stocks cross Garrett's desk everyday, everything from U.S. Robotics to the Rainforest Café.

GARRETT VAN WAGONER: Want another Hard Rock Café

version, except this time it's got a jungle motif? You think that has a lot of staying power, the old jungle motif? Howmany ways can you serve a hamburger, you know?

No, thank you. Next?

JORDAN GOODMAN: Here's somebody who has a great track record, a very smart guy.

GARRETT VAN WAGONER: No, thank you.

JORDAN GOODMAN: He's done very well for himself and hisshareholders coming out of nowhere, basically, in the last

two or three years. Everybody else wants to be a Garrett VanWagoner, too, and get along while things are going well.

1st MAN AT CONFERENCE: I was wondering, can I get your

autograph here?

GARRETT VAN WAGONER: Garrett Van Wagoner.

2nd MAN AT CONFERENCE: Hi. I'm [unintelligible]


8 10/2/2012



GARRETT VAN WAGONER: Nice to meet you.

WOMAN AT CONFERENCE: I'm Kim McAllister. [sp?] Iwanted to meet you. This is... you're why I came to thisconference.

GARRETT VAN WAGONER: Well, that's great. I'm glad that wehad a chance to meet.

It's hard to consider myself a superstar in anything, but, Imean, that's the title that has been thrown out by various

people and I guess there's the old line of everybody gets 15minutes. The thing that's disconcerting is I don't know if I'm

on my 14th minute with 59 seconds or I'm on my firstminute.

JOE NOCERA: Van Wagoner struck out on his own lastJanuary. By the summer he had the number one fund in thecountry, up 60 percent in less than six months. The fund

started with $100,000. By May he had a billion dollars under management and the money kept pouring in.

GARRETT VAN WAGONER: At the peak, we had some daysthat were over $40 million in a day. At one point in time in

late March and early April, the funds were doubling everyday.

JOE NOCERA: Fund managers at the top of their game become gurus, dispensing their wisdom on eager investors.Their every word is listened to with rapt attention. "What'sgoing to happen to the market?" people want to know. Whatcompanies are about to explode? What is he looking for in a

stock.

GARRETT VAN WAGONER: We're looking for, being in

small-cap growth, companies that we think are the best andthe brightest candidates out there. These are going to be thenext Microsoft, so to speak.

Hey, Rick, how are you? Good to see you.

JOE NOCERA: Getting an audience with Garrett can be acritical event for hungry young companies.

GARRETT VAN WAGONER: Garrett Van Wagoner. Nice tomeet you. Oh, there it is!

WHITNEY A. McFARLIN: Our device.

Innovative solutions for cardiac arrhythmias. That's whatwe're about, primarily driven by the bi-phasic wave formand...

JOE NOCERA: Just tell us a little about why you were upthere. Why were you visiting Garrett just now?

WHITNEY A. McFARLIN, CEO, Angeoin Corp.: Well, he is a potential funder of our company and we're in the process of doing the financing, basically selling stock. And to put it


8 10/2/2012



simply, we were up there begging for money.

This business is about human life. It is about quality of lifeand it's certain experiences like that that bring that home tous in the corporation.

JOE NOCERA: You're the CEO of the company.

WHITNEY A. McFARLIN: That's correct.

JOE NOCERA: You're the top guy in this company. Is this themost important thing you can be doing right now? I mean...

WHITNEY A. McFARLIN: It absolutely is the most importantthing I can do.

GARRETT VAN WAGONER: Wonderful. Thanks again. It'sgood seeing you again.

WHITNEY A. McFARLIN: Thanks again.

GARRETT VAN WAGONER: Appreciate it.

RON CHERNOW Author, "The House of Morgan": What Ifind very interesting about the mutual fund managers is thathere are people who are the new "masters of the universe."Their managing billions or, in certain cases, tens of billions of

dollars.

JORDAN GOODMAN: Well, Wall Street is really running thecountry today, in many ways, and this is a pressure that thecorporate executives feel. And they see it time after time. If they don't perform, they're out of there.

JOE NOCERA: Companies will do cartwheels to please powerful shareholders and when mutual fund managers wantstock prices to go up, they feel they have a right to demandit.

JIM CRAMER: Don't forget the mutual fund guys keep their job only if they pick the right stocks. You can makecompanies into the right stocks by demanding certainchanges, by demanding changes at Sears, by demandingchanges at Xerox, by demanding changes at IBM.

JOE NOCERA: Changes like last year's announcement that40,000 workers would be down-sized from AT&T. The share

price instantly bounced up almost $3. The merger of Chaseand Chemical Banks... 12,000 jobs lost, but Chaseshareholders made over a billion dollars. Directly or indirectly, the immense influence of the mutual funds wereresponsible for these upheavals.

And sometimes the employee a company fires is also a

shareholder who makes money when the price goes up.Consider, for instance, Mary Jane Range. A vice president atCitiBank, she was laid off as part of a restructuring two yearsago.

MARY JANE RANGE: It was going to be the place I retired


8 10/2/2012



from. It was a company that I had targeted and wanted to

belong to for a very long time.

JOE NOCERA: Mary Jane, who is divorced and single, has allher savings in the stock market and her biggest holding is inthe corporation that cast her out, CitiCorp.

[interviewing] How did you feel about holding the stock of this company that had laid you off?

MARY JANE RANGE: I never made the connection. I never made the connection that this is... this is stock in a companythat just took away my ability to earn a living.

JOE NOCERA: After the down-sizing at CitiBank, thecompany's stock, which had hit an all-time low, rebounded.

MARY JANE RANGE: The stock, as I recall, went down as lowas just slightly below 12.

JOE NOCERA: Twelve dollars a share.

MARY JANE RANGE: Twelve dollars a share.

JOE NOCERA: And now where is it?

MARY JANE RANGE: Eighty-nine.

JOE NOCERA: Eighty-nine dollars a share.

MARY JANE RANGE: Right.

JOE NOCERA: Today she's her own boss, a partner in anexecutive search firm matching up candidates, often people

who've been down-sized, with potential employers.

MARY JANE RANGE: How's your job search going?

In what I do now, I am totally reliant on myself. I don't havea pension. I can't even conceive today of being in a position

where you would have total job security.

JOE NOCERA: So what do people have to do?

MARY JANE RANGE: They have to take care of themselves. No one will take care of you any longer in this country, interms of long-term job security, withering pensions.

JOE NOCERA: And where does the market fit in thatscheme?

MARY JANE RANGE: The market is an enabler. It is a way for people to increase their accumulated wealth and to take care

of their future.

SHARON GORNIE: Twenty-four and seven eighths.

DOROTHY FREE: It's got to go back up. It's got to. It wasalready up there. It 's... everything has got to go back up.


8 10/2/2012



JOE NOCERA: Dorothy Free was also down-sized after many

years as an employee at IBM. She, too, has cast her lot withthe market.

DOROTHY FREE: I have another job now, as a secretary. Idown-graded my salary something wicked. This is it. I've

only got a couple more years to work. So you put moneyaway in investments and then, if you ever need something,when the time comes, you do have some money put away.

JOE NOCERA: Dorothy is Sharon Gornie's mother. Together they have a neighborhood investment club, one of 10,000

across the country that have been formed in just the lastyear.

SHARON GORNIE: Fortune Adviser, Fortune 500...

Here's the America's 100 Fastest-Growing Companies.

I saw an article in Women's Day magazine, "How to start aninvestment club," and I said to my mom, "Mom, do you wantto start a club with me? Let's do this."

We could get The Wall Street Journal and see what the highwas.

Why not take a shot at it? Why not be with everyone elsethat everyone's making so much money, a lot of money?

JOE NOCERA: For the first time average Americans likeSharon and Dorothy see the stock market as both necessaryand safe.

DOROTHY FREE: I don't think savings banks are the way togo anymore at all. I don't even think you should have achecking account in a bank anymore.

JORDAN GOODMAN, "Money" Magazine: I was doing a radioshow in Kansas City recently and this woman had gotten into20th Century Ultra, which is probably about the mostaggressive mutual fund you can get. And it was up about 50

percent last year... something like that. So she said, "Even if Idon't get 50 percent, it's okay. If I get 25 percent, that'sokay." I said, "Well, how about if it went down 25 percent?""No, no. Not down. Just... I'm not greedy. I don't have to get50 percent." Well, in these people's minds, the idea of it

going down 25 or 50 percent is nonexistent.

DOROTHY FREE: If the stock market does drop, that's okay.It will go back up again. It has to because the economygrows all the time. I'm very careful with my... with mymoney. I would not ever gamble on anything. I will notgamble.

JAMES GRANT, "Grant's Interest Rate Observer": People... Ithink people should expect the stock market to deliver goodreturns over time, with the understanding that from time totime it will tear your heart out. The stock market is a little bit


28 10/2/2012



like a savage beast. It is a nice thing to think you've

domesticated, but every once in a while it'll remind yousuddenly, maybe by taking your hand off, that it is not the

pet you think it is.

JOE NOCERA: So how did we come to trust such a savage beast?

NEWSREEL NARRATOR: The tremendous crowds which yousee gathered outside the stock exchange are due to thegreatest crash in the history of the New York Stock Exchange.

JOE NOCERA: The crash of '29 turned out to be the greatestmarket disaster of all time, but there was a big difference

between then and now.

RON CHERNOW: Main Street was really not involved in thestock market in the 1920s. It was considered the sort of thingthat racy and rather corrupt city slickers did. It was not

considered a place for the whole family, as the stock marketis considered today. And so when news of the crash came,

probably a lot of people in small towns and farms acrossAmerica felt a sense of grim satisfaction.

JOE NOCERA: But nobody knew how bad it was going to get.The crash led to the Depression, which affected everybody.And the Depression created a set of financial habits that

would last generations. We became extraordinarilyrisk-averse. We hoarded what we had. We never borrowed.And as for investing, it was a laughable idea.

The years went by. The New Deal came and went. World

War II began and ended. Your children grew up and had their own children and color television was invented all before

you recovered the money you had lost in the crash of 1929.It took 25 years for the Dow to reach 381, which had beenthe pre-crash peak. The year was 1954.

ACTOR : ["Mr. Webster Takes Stock," Merrill Lynch promotional film] Playing the market? You're not serious.

ACTRESS: Not playing the market, investing. There's adifference.

JOE NOCERA: The market came back in the '50s, more thantripling by the end of the decade. But the old financial habits

of the Depression were still with us. Besides, didn'tAmericans have life-long jobs and guaranteed pensions?What did they need the stock market for? It wasn't until their children, today's baby boom generation, came of age that thestock market started to matter. Why? Because by then therewas a force at work that seemed to practically demand it.

RON CHERNOW: Every generation, I think, has a defining

economic event. For the generation before the baby boomers, the defining event was the Depression and that left people very preoccupied with jobs and it created ageneration of people who were very security... security-


28 10/2/2012



oriented. When the baby boom generation left school, the

first great defining economic was the great inflation of the1970s.

Pres. JIMMY CARTER: The erosion of our confidence inthe future is threatening to destroy the social and the politicalfabric of America.

WILLIAM FLECKENSTEIN, Money MANAGER: The fear of inflation was everywhere. People believed ... and you couldgo back and read articles that were written at the time ... thatthere was no way the inflation rate was ever going to be

brought under control.

JOE NOCERA: As inflation surged, people watched their savings erode in the bank, which meant they had to dosomething different with their money, either spend it or

invest it. A new psychology was taking hold in America.

RON CHERNOW: It was really at that point that stocks began

to lose their stigma as a very risky investment.

JOE NOCERA: And so, when the modern bull market beganin August of 1982, a generation sat up and took notice. Andone man more than any other became the new Pied Piper for the millions of baby boomers who were poised to becomeinvestors. He managed a little-known mutual fund calledMagellan. His name was Peter Lynch.

LOUIS RUYKEYSER: ["Wall Street Week"] Peter, what didyou do that the other fellows didn't do?

PETER LYNCH, Vice President, Fidelity Management &

Research Co.: Well, I'm not sure what the other people weredoing, Lou, but what I've tried to do is I've worked as hard asI could. I've visited over 200 companies every year.

JOE NOCERA: But hard work was just the beginning. Lynchalso had an incredible instinct for picking stocks that wereabout to explode. And what were these great picks of his?

PETER LYNCH: Well, right... right over here we have aKentucky Fried Chicken, the old colonel. I remember in theearly, mid-'60s, when I started at Fidelity, this was one of thesingle most exciting stocks. I mean, it was more exciting than

Netscape. It was more exciting than Microsoft. It was it. Itwas better than a microprocessor or anything. And then,

right next to it, we have one of my great companies of alltime, Dunkin' Donuts. Amazing company. Made great coffeeand they put it in a china cup. They didn't serve it in acrummy paper cup. If somebody invents a new logic chip,I'm not going to know about it. No one's every going toinvent a better donut.

JOE NOCERA: One reason Lynch became the stock picker

for the middle class was that he had such middle class tastes.He used to prowl shopping malls and watch what peoplewere buying and what stores they were visiting.


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PETER LYNCH: This is like the New York Stock Exchange,

right here, you know? Look at over here to Athlete's Foot. Imean, here's... here's a chance for the public, if they knewsomething about Nike... their stock went to over 100. Here'smy... one of my biggest stocks in my life, Taco Bell, rightover here. And here's Cinnabon. I like to research that if that

went public.

JOE NOCERA: Well, we can do a little research right now.

PETER LYNCH: One Cinnabon, please.

DIANA HENRIQUES, Author, "Fidelity's World": Peter Lynch

is a genial, open, reassuring person. You know, a good doseof Peter Lynch and you feel empowered. The stock marketlooks easy. Investing looks fun. Mutual funds look like a surething.

JIM JUBAK , "Worth" Magazine: If the mutual fund industry

had not had a Peter Lynch, someone would have had to havegone out and invent Peter Lynch.

PETER LYNCH: I mean I'd rather have this than a logic chip.

JIM JUBAK: People can understand what Lynch was all

about.

JOE NOCERA: Sometimes the bets Lynch took were breathtaking.

PETER LYNCH: Well, Joe, this is my greatest stock ever for the fund. This was the largest position in my fund, inMagellan, in 1982, and everybody thought I was crazy.

JOE NOCERA: Remember Chrysler in 1982?

LEE IACOCCA: Me, I'm in the car business.

JOE NOCERA: It was on the verge of bankruptcy. The U.S.government had to guarantee its loans just to keep thecompany in business. Lynch put $23 million, 5 percent of hisfund, on Chrysler and its new minivan. And what did theChrysler bet add up to, and all of his other great stock picks?

PETER LYNCH: Well, if somebody had invested $1,000 inMagellan on May 31st, 1977, the day I left, that $1,000

would have been $28,000, May 31st, 13 years later, 1990.

JOE NOCERA: That's a pretty incredible...

PETER LYNCH: Yeah, that was...

JOE NOCERA: I can see why that would attract a lot of attention.

PETER LYNCH: Yeah, I was... I was happy.

JOE NOCERA: What that means is that the Magellan Fundwas up nearly 3,000 percent in the 13 years Lynch ran it. But


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all of Wall Street was booming in the '80s. Corporations were

merging and acquiring and taking each other over. Stock prices were skyrocketing. The Dow more than tripled between 1982 and 1987. It seemed as though the bull marketwould go on forever. And then:

TELEVISION ANCHOR: They're calling it the "Monday

massacre," the worst drop in Wall Street history. By theclosing bell the Dow-Jones Industrial average was in thesteepest fall in its 103-year history.

JOE NOCERA: It was October 19, 1987. That's me with the beard, outside a Fidelity office in Boston, watching the Dowself-destruct. Like millions of other Americans, I thought thiswas the end.

JORDAN GOODMAN: I remember going out at lunch time to

the local Fidelity office and seeing a huge crowd gatheredaround, watching the tickertape, in shock that the marketcould fall 100 points and then 200 and then 300 just... and

there was no breaks on this thing.

PETER LYNCH: Well, I was very well prepared for the crashof 1987. I... my wife and I took our first vacation in eight

years and we left on Thursday in October and the day... Ithink that day the market went down 55 points. And we wentto Ireland, first trip we'd ever been there. And then onFriday, because of the time difference, we'd almostcompleted the day and I called and the market was down115. And I said to Carolyn, "If the market goes down onMonday, we better go home." It went down 508 on Monday,

so I went home. So in two business days, I had lost a third of my fund.

JOE NOCERA: But in the end, the 1987 crash turned out to be, oddly enough, rather reassuring.

PETER BERNSTEIN, Investment Consultant: Here we had, for a single day, probably the biggest drop we've ever had in

market history and nothing happened. And in time, andreally not so long, stock market got back to where it was.And that led to the feeling that, in the long run, being in thestock market is great, that weak markets are buyingopportunities, not times to sell. This wonderful event in 1987is what people today are carrying around in their heads."Don't worry if the market goes down. Nothing bad can

happen."

JOE NOCERA: After the crash, American investors embraced

the market, and especially the mutual fund industry, withrenewed fervor. Today one in 50 American households hasmoney in the Magellan Fund and the customers of FidelityInvestments alone constitute some 4 percent of the country.

[interviewing] There's a huge amount of money that flowsthrough here. I mean, we're talking about billions and billionsof your and my money.

PETER LYNCH: Absolutely. Absolutely. Absolutely.


28 10/2/2012



JOE NOCERA: American money.

PETER LYNCH: Absolutely. We do... you know, it's publicinformation. We do between 5 and 7 percent of the tradingon the New York Stock Exchange.

JOE NOCERA: Comes out of this room?

PETER LYNCH: This room, right over here.

JOE NOCERA: These people.

PETER LYNCH: You got it, these people.

JOE NOCERA: Even after he retired from Magellan, Lynch

remained a fanatical popularizer of the stock market. But hehad one important caveat: You needed patience.

PETER LYNCH: My best stocks have been the third year I bought them... not the third week, not the third month, the

third, fourth year. People want something to happen in aweek, in two weeks. It doesn't work that way.

RADIO ANNOUNCER: You've got it all KNBR, 68 SanFrancisco.

JOE NOCERA: It's only been six years since Lynch left

Magellan, but today's fund industry has a whole differentmindset.

MAN ON PHONE: Garrett?

GARRETT VAN WAGONER: Yeah?

MAN ON PHONE: We're going to try to cross 75 G's

[unintelligible]

GARRETT VAN WAGONER: Okay.

MAN ON PHONE: Do you need to be involved either way?


MAN ON PHONE: Asking? No?


MAN ON PHONE: No interest?

GARRETT VAN WAGONER: No interest.

Yes? No, thank you. Next.

Hey, if you hear of any pieces of Cardiac Pathways down inthe hold this afternoon, let me - give me a call, please.

MAN ON PHONE: AAS, you serve a whopping 800 shares at32 and five eighths.

GARRETT VAN WAGONER: That's what I like.


28 10/2/2012



MAN ON PHONE: Beautiful.

GARRETT VAN WAGONER: See you later.

MAN ON PHONE: Thank you.

GARRETT VAN WAGONER: 'Bye. God bless this country!

JOE NOCERA: Garrett Van Wagoner is still the new kid onthe block, but the comparisons have already begun.

[interviewing] How do you feel when you get compared toPeter Lynch?

GARRETT VAN WAGONER: A little embarrassed, a little bit

surprised and flattered, I guess, would be the things thatcome to mind. I- you know, he- he's a legend in this business.

Does he want to come out of the position or is it justtrimming?

It's going to be a long time before I'm willing to sort of acceptthat kind of status. I'd like to do it for 10 or 15 years first.

JOE NOCERA: But Garrett won't be given that kind of time.In the overheated market of the '90s, fund managers arescrutinized not just year to year, but week to week and even

day to day.

GARRETT VAN WAGONER: This is not a charitable business,a charitable institution.

JOE NOCERA: By the summer of 1996 Garrett's fund had

long since hit its peak of 60 percent and was stumbling badly.

GARRETT VAN WAGONER: Yeah, 45... under 45, give me aholler.

JOE NOCERA: Thousands of people who came in at the top

were losing money with Garrett.

GARRETT VAN WAGONER: Right. I want to... I want it flat onits butt.

JOE NOCERA: How much did you lose yesterday?

GARRETT VAN WAGONER: I lost about $18 million in the big

fund.

JOE NOCERA: And that was the worst day you've had sinceyou opened for business?

GARRETT VAN WAGONER: Worst day I've had since I've been open for business.

JIM JUBAK: You've got a tremendous amount of money inthat fund that came into the fund after it was up 40 or 50

percent or 60 percent, with the expectation that that's whatthe future is going to look like.


28 10/2/2012



WILLIAM FLECKENSTEIN: My guess is, as he got close to

being up 60 percent, he probably raised 80 percent of themoney he has under management, so it's quite likely that theoverwhelming majority of his investors, their first taste of his

performance was a sharp setback.

WILLIAM FLECKENSTEIN: Under this kind of short-term pressure, Garrett doesn't have time to buy and hold the wayLynch did. His strategy is all about moving in and out of stocks quickly, sometimes in a single day. Always he's takingthe pulse of the market, trying to stay one step ahead of it.It's high-stakes poker.

GARRETT VAN WAGONER: I got one more for you today. I'vegot 25,000 RXT to buy with a 6 top, please.

WILLIAM FLECKENSTEIN, Money Manager: What's particularly dangerous about the present mutual fund boomis what is called investing is really speculating. The

techniques are more about trading, rapid turnover, payingany price for a stock, as long as it goes up or behaves acertain way. It is about crowd behavior and stock price

behavior, not about analyzing the underlying businesses.

GARRETT VAN WAGONER: God bless this country. Let's feedthe old ducks while they're quacking.

JOE NOCERA: The companies Garrett is investing in aren't

Dunkin' Donuts and Kentucky Fried Chicken. They aremainly technology and health care stocks that most of ushave never heard of.

GARRETT VAN WAGONER:HNC Software has gone from up1 to up seven and a half in about a minute and a half.

JOE NOCERA: New companies with little or no track record.

GARRETT VAN WAGONER: Marking them up!

DIANA HENRIQUES: The way the fund industry has changedhas been to liberate fund managers to pursue hot

performance anywhere they can find it. And the result of that is when you buy that fund, you have no idea what thatfund manager is going to do with your money. He's free to

put it in almost anything.

GARRETT VAN WAGONER: That's what I like!

JOE NOCERA: Garrett's stock picks are among the mostvulnerable and volatile around, but at the end of the day theycan produce eye-popping results.

GARRETT VAN WAGONER:Oh, my God! Look at IntegratedSystems today, up 8-and-three-quarters! What, did theydiscover gold?

JOE NOCERA: [interviewing] Did you make money today?

GARRETT VAN WAGONER: Yeah, we made good money


28 10/2/2012



today, actually, and we had some real high flyers today, so

we had a good day today.

JOE NOCERA: Do you have a guess how much?

GARRETT VAN WAGONER: I'm going to say we made... we probably made about $13 million, $14 million, is going to be

a guess today.

JOE NOCERA: Actually, he guessed wrong. It was more like$22 million.

[interviewing] Not bad?

GARRETT VAN WAGONER: Not bad.

RON CHERNOW, Author, "The House of Morgan": The problem is that all of the mutual fund managers, I think, aretrapped in this rather deadly, vicious circle, that the moresuccessful they are, the more money flows into their mutualfund. The more money that flows into their mutual fund, themore difficult it is for them to beat the market averages or even to match their own past performance. And I think thatwe may see future situations like that of Jeff Vinik at theFidelity Magellan Fund, where mutual fund managers will try

to do very strange and unconventional things because it becomes increasingly difficult to outsmart the averages.

JOE NOCERA: Jeff Vinik was a young whiz kid at Fidelitywhen he inherited the Magellan Fund in 1992. Within threeyears Magellan had ballooned to over $53 billion, making it

by far the biggest fund in the country. In early 1996 Vinik made a dramatic move, shifting Magellan heavily into bonds

and out of stocks. He was betting, in effect, that the bullmarket was about to end, but he bet wrong.

JAMES GRANT: Jeffrey Vinik made a bad guess and bought bonds and missed out on a truly, you know, wonderfullevitation in the stock market and had the epaulets of hiscelebrity stripped from his shoulders and left the Magellan

Fund.

PETER JENNINGS, ABC News: ["World News Tonight"] Theman who runs the world's largest mutual fund has resigned.Jeff Vinik...

JIM JUBAK: Jeff Vinik's departure should send up cautionary

flags for the mutual fund investor.

PETER JENNINGS: Magellan's returns this year have beenwell below most other comparable funds.

JIM JUBAK: His departure means that people are really notwilling to take short-term under-performance in theexpectation of future return. I think that's the really scarything, that he really only under-performed for a couple of quarters.

JOE NOCERA: The public's impatience for big gains is so


28 10/2/2012



great that many people have taken investing into their own

hands. The Internet is crowded with hot stock tips, financialchat rooms and lots and lots of so-called "advice." One of the most popular sites on the net is an on-line investingforum called The Motley Fool. Its founders, two brothers

named Dave and Tom Gardner, claim that if their subscribersinvest their money the Motley Fool way, they can count on

20 percent growth in their portfolios per year... guaranteed.

DAVID GARDNER , Motley Fool Co-Founder: We've identifieda couple mechanical investment approaches which can beused by anybody, take only about 30 minutes a year, and for

more than 25 years have returned that 20 percent and wedon't see any big change in the next 25 years. So when weteach that approach, we're teaching people financialself-reliance.

JOE NOCERA: The Motley Fool is based in a townhouse inAlexandria, Virginia, and staffed by 20-somethings who, likethe Gardner brothers, are true believers in the market. They

lead their 250,000 subscribers in a vigorous hunt for the next big winner.

TOM GARDNER , Motley Fool Co-Founder: Microsoft 10years ago, had you bought it, not traded it, with your broker recommending that you trade it, not in a mutual fund, whereit would have been diluted by 60 other stocks... had you

bought it, it's grown at 60 percent a year, so $10,000 is wortha million dollars 10 years later.

JOE NOCERA: The problem is, how do you know which of

the thousands of hot stocks out there are going to turn out to be the next Microsoft? That's the hard part and it's something

Motley Fool's subscribers found out the hard way.

The company was called Iomega. In early 1995 it came outwith a jazzy new computer device called the Zip Drive.Motley Fool subscribers fell in love with the product and

started an on-line bulletin board devoted exclusively toIomega. In this electronic hothouse, the stock caught fire.

DAVID GARDNER: And so we bought the stock at 2-and-a-half, added it to our on-line portfolio, and over the courseof the next year and half, it ran up as high as 55.

TOM GARDNER: When the stock was at 55, our $5,000

investment ... think about it ... was worth over $100,000.

JOE NOCERA: As the stock attracted more and moreattention, the Motley Fool chat board became a frenzied,

giddy place. The more Iomega went up, the more of their livelihoods people poured into the stock.

[on screen: computer messages reading, "As I went to bed

last night and thanked the Lord for his blessing, I thought:how lucky I am to be in a stock up 1,500 percent," "I put 75

percent of my portfolio in Iomega," "My whole family is inIomega and it will pay for my son's first two years of college," "This is better than sex."]


28 10/2/2012



By 1996 the Iomega phenomenon had spread well beyond

the Internet. Last summer, at a Charles Schwab office in SanFrancisco, people were talking about little else.

2nd INVESTOR: Iomega was the talk of the town, so to speak,on the stock market and I would read about it and I would

see that it would rise incredible amounts in a day.

5th INVESTOR: I bought it at 24 and it went up to 80 and itsplit. And after it split, it went back to 54.

2nd INVESTOR: And the next morning I woke up and calledup the broker and it was at 55. And I... I was, like, "You

know, this is kind of silly, but it's great, you know?"

JOE NOCERA: But what had the company done to deservethis kind of run-up? Not much. It was a three-productcompany with profits of only $14 million. But at the peak of the frenzy Iomega stock was worth over $5.5 billion.

JAMES GRANT: Stock prices going up case people whowould not have dreamt have buying them when they weredown to go out and buy them because, after all, they willcontinue to go up. And the manifestation of this psychology

in the marketplace has been an extraordinary array of overpriced specimens... you know, companies that changehands at 600 times the sum of money they can expect to earnthis year. Literally, things that are seen once, twice or three

times in an entire investment lifetime have come to pass in1996. It has been a living museum of speculation.

JOE NOCERA: In Iomega's case, it was a bubble that was

destined to burst and eventually it did.

2nd INVESTOR: And I watched it go from 55 to 54 to 53 to 52

to 51 to... all the way down to, like, 48. And I go, "I got to...I"... you know, "I got to get"... I sold, at that point.

5th INVESTOR: And I put in a stop and sold it at 40, 43.

JOE NOCERA: So and the yearly high is 55-and-an-eighthand it's down now to 23?

6th INVESTOR: Right. Iomega's been dropping like a rock for a good week or two weeks.

JOE NOCERA: And the Motley Fool boards were full of howls of pain.

[on screen: computer messages reading, "Nobody gets it. Theopera is over," "Last time I listen to you."]

[interviewing] Show us Iomega here.

JIM CRAMER: Okay. Now, this has been a very severecorrection of Iomega.

JOE NOCERA: Look at that.


28 10/2/2012



JIM CRAMER: The real hype, Motley Fool hype, was working

right around here. It was a good horse, but it was just a horseand you had to get off it. And there are other horses outthere. Try to pick a horse that's not a sprinter. Try to pick onethat's going to be around.

DAVID GARDNER: The stock got ahead of itself, as often willhappen with great growth companies, we think. And sosomebody could have bought the stock at 55 and seen hisinvestment melt down to about 21 today. Now, at the sametime, many other people bought at 2 and 5 and 10 and 15and 20 and may have sold at 48, for all we know.

WILLIAM FLECKENSTEIN: In Japan they had a name for this.They called them the shin gin ri and it literally meant "newhuman being." They were the 20-something-year-old people

who had had no experience in the market who were put incharge of all the investing. And... and they thought thatnothing would ever go wrong.

JOE NOCERA: The Japanese stock market, which had beenthe wonder of the '80s, crashed in 1989 and it's never recovered. Even today the Japanese market is just over half

what it once was and once euphoric Japanese investors nowfeel burned.

WILLIAM FLECKENSTEIN: I find it somewhat ironic that here

we are, seven years after that bubble burst, the Japanese arestill trying to pick up the pieces. At that moment in time, weare doing many of the very same things. People are buyingstocks for one reason: They are going up.

6th INVESTOR: I have two kids I want to put through collegeand I figure this is the best way to be able to double my

money.

2nd INVESTOR: Necessity is the mother of invention, so I'veheard, and I have a wife and four kids and I'm a policeman in

the city here and I figured I needed to make some moremoney.

JOE NOCERA: Well, why not just put it in the bank?

5th INVESTOR: Well, the bank only pays you 3 percent andit... it makes you feel like you're not gaining ground and thestock market's faster.

WILLIAM FLECKENSTEIN: People have confused need withcertainty. "We need this to work. It seems like it will,therefore it will." That's a little bit like going to the track and

betting on number 3 and saying, "God, I really need thishorse to come in for me." Well, just because you need it tocome in doesn't mean that it will.

PETER BERNSTEIN, Investement Consultant: It's funny that people are motivated by anxiety to take a risk. You think thatanxiety would make them risk-averse.


28 10/2/2012



SHARON GORNIE: Let's go! Time to go home! Come on!

JOE NOCERA: Sharon eventually sold Microsoft. The nexttime we caught up with her, she and Russ had put their life'ssavings into two tiny, volatile technology stocks. Why?

SHARON GORNIE: Because we're working very hard and notfurthering ourselves. It's too slow. We have got to dosomething aggressive.

RUSS GORNIE: It is scary, but, you know, it's... at this point,she just wants to... Sharon... well, actually, she took a littlemore and just invested recently that was very conservative

and she kind of went and did something that I think we'llmake out on, as long as the market doesn't crash. But yeah,right now, just about everything is in there.

INTERVIEWER: What'd she do?

RUSS GORNIE: She went and invested in a stock that she wastold was going to do very well.

SHARON GORNIE: To tell you the truth, I don't even knowthe name of it. I know the call letters are A-M-L-N. It'ssupposed to double by August.

INTERVIEWER: Do you worry about your future, financially?

RUSS GORNIE: Oh, yeah. All the time. That's why we'retrying to do something. That's just what I'm saying. There'sreally nothing to depend on except yourself, so... yeah, weworry about it.

PETER BERNSTEIN: The money that people used to put in thestock market was money that they hoped to get rich on or get... play with or maybe finance their trip to Europe or something. What's going in today is blood money. With jobsless secure and with, really, the... the wonderful corporate

pension fund that promised you a pension of X percent of your final salary when you retired... with that no longer asimportant and taking care of a smaller and smaller

proportion, this is blood money that's in there.

RON CHERNOW: I think that what has been happening is akind of fear approaching a panic that's spreading through the

baby boom generation, which has suddenly discovered that it

will have to provide for its own retirement.

NARRATOR: [Mutual Fund Advertisement] If retirement is a bridge to be crossed when we get there, then let us begin.

JOE NOCERA: Have you thought about how much you're

going to need to retire?

MARY JANE RANGE: Sure. I have. I think I'm probably goingto need anywhere between a million and a million-and-a-half dollars to retire.

JOE NOCERA: That sounds like a lot of money.


28 10/2/2012



MARY JANE RANGE: It is a lot of money.

JOE NOCERA: Are you there?

MARY JANE RANGE: No! No, I'm not there.

JORDAN GOODMAN: All these particularly late baby boomers, people in their late 40s and 50s, they've beenspending their whole life. They have not been saving. And

now they see their retirement not that far off... 10, 15 years.Hey, people don't believe there's going to be any SocialSecurity. There will be something called Social Security, butit's not something you're going to live... want to live on.

MARY JANE RANGE: The stock market was not a factor of my parents' lives. My father was a member of the... of theunion. He had a pension. He retired at 60 years old and mymother still lives on the survivor's benefit of that pension.

JOE NOCERA: And that's never been a possibility for you?

MARY JANE RANGE: It was not the road I chose. I'mcounting on the market for my retirement.

Micron Technology up a quarter... 1-and-a-quarter.Excellent.

JOE NOCERA: With so much riding on the market, we seemto have forgotten what a fragile and human instrument itactually is, how much its movements depend on how we feelabout it. Right now, at a moment when we're counting on themarket as never before, we feel it will always take care of us,

but will it?

WILLIAM FLECKENSTEIN: In nature, in life, in everything,there are cycles. There's no such thing as the elevator thatonly goes up, which is what the stock market is in people'sminds now. The risk is that if that process gets started again,and we only traverse back to what the average level of expensiveness, never mind cheap, like we were in 1982when this process, this bull market, started, but if we only getto average, that would mean a decline in the stock market of 50 percent.

JOE NOCERA: In other words, just to revert to its historicnorm, the market would have to lose some 3,000 points.

WILLIAM FLECKENSTEIN: What'll happen is we will simply

get too high. There won't be enough new money coming in tokeep the market going up. Losses will start and losses will

beget losses and then people will be people and they'll sell.

JIM CRAMER: Five hundred in 295s, five hundred[unintelligible] [unintelligible] Buy me five ANET! Buy mefive ANET! I want to bring in these shorts! I want to bring inthe [unintelligible] okay, the impossible stuff to buy andHMTT!


28 10/2/2012



JIM JUBAK: The real trap for any investor in a market that's

been as volatile as this one, where rumors sweep through theInternet, is believing that you can get in early and you canget out early and you can beat the consequences. And of course, if everyone believes that, it means no one gets outearly.

JIM CRAMER: I want another 10 Boeing. It's absolutely right,okay?

DIANA HENRIQUES: It may be true that, over time, the stock market will out-perform other forms of investment. But it is

also true that you can take 10, 15, 20-year slices out of thatlong track record and find very disappointing returns. For example, if you'd invested at the height of the 1960s go-gomarket, in 1968, you didn't recoup your investment until

1982. If those happened to be your retirement years, youwere in real trouble.

There is no immunization of the American stock market thatkeeps us from ever having a long, dull, grinding bear market.It could happen again.

RON CHERNOW: One of the things that I find myself worrying about is what would happen if we had a sustained

bear market after a lot of the baby boomers had retired?They were all past 59. They were beginning to draw from

these different retirement plans that were invested in thestock market and yet, suddenly, their stocks were under water. On paper, their investments were down 30, 40, 50

percent. What would they do?

PETER LYNCH: Still interested? FRONTLINE online atwww.pbs.org goes beyond the broadcast. Ask top

professionals your own investment questions.

JIM CRAMER: Sold!

PETER LYNCH: Get their wisdom on whether or when a bear

market is coming.

WILLIAM FLECKENSTEIN: ...there are cycles.

ANNOUNCER: And check out strategies for young investorsand lots more at FRONTLINE online at www.pbs.org.

And next time on frontline: If it bleeds, it leads. But whathappens when the news cameras go away?

ROSS McELWEE: It's supposed to be real life, what we see onthe news, but it seems increasingly unreal to me.

ANNOUNCER: From Ross McElwee, the creator of Sherman's March, comes an intimate encounter with God,fate and the "Six O'clock News". Watch FRONTLINE.

Now your letters. "Secret Daughter," producer June Cross's personal story of her mixed-race upbringing, prompted


28 10/2/2012



hundreds of you to respond.

RICK EIDEN: [Colorado Springs] Dear frontline: For my wifeand I, the racial gap in this country was narrowed for thosetwo hours.

MICHAEL LEDOUX: [Boston] I believe this program

transcended race. It was about family.

ANN CALDWELL: [New York City] June was able to showeach person's humanity, frailties and strength of character.

ANGELA BURT-MURRAY: [Brooklyn] While watching "SecretDaughter," I found myself getting angry for June Cross.

LIDIA LoPINTO: [Yonkers] June Cross could never have beensuccessful if her mother did not do what she did.

C.J. HICKMAN, Jr.: [Phoenix] This could have been one of themedia's finest hours, responsibly exposing the pain of racismfrom both sides.

ANNOUNCER: But many of you had an opinion about June'smother, Norma's, decision to give her to a black family to beraised.

LOUIS J. BEASLEY, Jr.: [Reston, VA] Dear frontline: I wonder if June Cross's saga is more about the failure of a mother tomeet her responsibilities than race. My wife and I have beenmarried 27 years, bore and raised a 26-year-old bi-racial son

... Our view as that choice of mates was our personal business and society could take it or leave it. Can'tunderstand the importance which June's mother placed onthe acceptance of "friends."

ANN CALDWELL: [New York, NY] Dear frontline: I wantedvery much not to like Norma. It would be very clear-cut to

say that she abandoned June for her self-interests. However,she obviously was determined to remain in her daughter's lifeand not to abandon her ... This is a celebration of the factthat we are human. We make mistakes and don't alwaysunderstand why things happen. Bravo, June ... Thanks for sharing your story.

ANNOUNCER: There are dozens more fascinating responsesat FRONTLINE's Web site. And don't forget to write.[DEAR FRONTLINE, 125 Western Ave., Boston, MA

02134; Fax: (617) 254-0243; http://www.pbs.org; e-mail:[email protected]].

BETTING ON THE MARKET WRITTEN BYRachel Dretzin and Joseph Nocera

PRODUCED BYRachel Dretzin

DIRECTED BY Ned Bastille


28 10/2/2012



CORRESPONDENT

Joseph Nocera

EDITOR Ned Bastille

ASSOCIATE PRODUCER Lauren Cooper

CAMERAGregory Andracke Bob Elfstrom

ADDITIONAL CAMERAJames HellingRobert HannaMark MolesworthFoster Wiley

SOUNDRay DayJeff EdrichDuncan ForbesMichael Scott GoldbaumKirk Nehring

Rick PattersonDean Sarjeant

Nelson StollPaul Vanderveen

ON-LINE EDITORSShady HartshorneSteve Audette

SOUND MIXGrant Maxwell

COMPOSER Jon Ehrlich

GRAPHICSClive Helfet

ASSISTANT EDITOR Jonathan Daitch

PRODUCTION ASSISTANTS

Amy ArmstrongShari Soloman

INTERNSAlexis RobieJodie Rosen

ARCHIVAL FOOTAGE AND PHOTOGRAPHSABC NEWS VIDEOSOURCEARCHIVE FILMSCHICAGO TRIBUNEHOT SHOTS


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COOL CUTS

FIDELITY INVESTMENTSIOMEGAHILL, HOLIDAYINSTITUTIONAL INVESTOR

KNBR RADIOLOS ANGELES TIMES

PETER LYNCH NEW YORK STOCK EXCHANGEUPI/BETTMANWALL STREET WEEK

STOCKMASTER.COMQUOTE.COMVANDERBILT TELEVISION NEWS ARCHIVESWORLDVIEW ENTERTAINMENT, INC.

SPECIAL THANKSFORTUNE MAGAZINESTEVE RUBEL & WESTCHESTER COMMUNITYCOLLEGE

CHARLES SCHWABDAVID GRUBIN PRODUCTIONSINVESTMENT SEMINARS, INC.

This program was based, in part, on the book "A Piece of The Action", by Joseph Nocera

FOR FRONTLINE

POST PRODUCTION DIRECTOR Tim Mangini

POST PRODUCTION PRODUCER

M.G. Rabinow

AVID EDITORSSteve AudetteShady Hartshorne

PRODUCTION ASSISTANTAndrea Davis

ON-LINE EDITORSMark SteeleMary E. Fenton

Jim Deering

SERIES GRAPHICSDennis O'Reilly

CLOSED CAPTIONINGThe Caption Center

COMMUNICATIONS DIRECTOR Jim Bracciale

SENIOR PUBLICISTRichard Byrne


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PUBLICISTS

Diane HebertTess Oliver

PROMOTION COORDINATOR Eileen Walsh

RESEARCH ASSISTANTTracy Loskoski

OFFICE COORDINATOR Lee Ann Donner

SPECIAL PROJECTS ASSISTANTMin Lee

SENIOR STAFF ASSOCIATEAnne del Castillo

STORY EDITOR Karen O'Connor

UNIT MANAGERS

Robert O'ConnellValerie E. Opara

BUSINESS MANAGER Janel G. Ranney

COORDINATING PRODUCER Robin Parmelee

DIRECTOR OF ADMINISTRATION

Kai Fujita

SERIES EDITOR Marrie Campbell

EXECUTIVE PRODUCER Michael Sullivan

SENIOR EXECUTIVE PRODUCER David Fanning

A FRONTLINE coproduction with Ofra Bikel Productions,Corp. © 1997

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