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Fools Rush In


By David Denby

Little, Brown -- 337pp -- $24.95

In early 2000, David Denby, faced with a dissolving marriage and the prospect of losing his seven-room Manhattan apartment, set out to make $1 million. With such a bundle, he could keep his apartment. Hell, maybe his family would even stay intact. American Sucker is the tale of Denby's rush into the stock market -- or, to be more specific, the NASDAQ. The results, though often funny and insightful, are not pretty.

Denby, a movie critic for The New Yorker, kept a journal through his nearly three years of investing. Quotes from this give the book an urgent, "what next?" energy, even though we know Denby's decision to invest fully in tech stocks coincided almost exactly with the bursting of the NASDAQ bubble. As a result, reading Sucker isn't like driving by a car wreck -- it's like watching the accident as it happens.

By chance and design, Denby meets with many of the big players of the tech boom and invites them to be characters in the book he plans to write. He lunches with equity analyst/media darling Henry Blodget and attends dinner parties at the Tribeca loft of ImClone Systems (IMC) CEO Samuel D. Waksal. (Yes, Martha Stewart is there, too.) Tech guru George Gilder and then-Securities & Exchange Commission Chairman Arthur Levitt Jr. make cameos. Along the way, Denby muses on consumer envy, the pain of divorce, and NyQuil as a sleeping tonic. In the end, he can't overcome the bear market. By the book's close, Denby has lost $900,000 on paper, Blodget is banned from Wall Street, Waksal is in jail, and the cherished apartment is sold.

Sucker's main lesson for any investor is an easy one: Do your homework. Couldn't Denby just once have met with a financial adviser or read a company's income statement instead of getting his investment advice from CNBC and a man yelling at a subway stop? True, the literary result would probably not have been half as entertaining. But Denby might still be enjoying his spacious apartment. By Kathleen Madigan

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