A Weekly Column
By Joseph Walker


It was an innocent question. Honest. I didn't know that it could land me in jail.

I was just so excited about what I saw happening in the company for which I was working at the time. The company had struggled financially for years and had incurred a great deal of debt. But all of that debt was buying state-of-the-art technology and equipment, and with the brilliant thinking of our executive board some of the best and smartest people I had ever known we were doing some innovative, exciting things. I was sure our profits would soon be soaring.

So it seemed to me that this would be the perfect time to buy stock in our company. Now, keep in mind that I am a total idiot when it comes to matters financial. I don't know an annuity from a gratuity, and until recently I thought the FDIC was the international body that governs soccer. But this seemed so clear to me. The price of our stock was absurdly low less than the price of a Happy Meal. It had to go up it just HAD to.

I started looking for money every place I could find it. I considered taking out a loan in order to purchase stock. And I wanted to share this with everyone I knew. Because I worked for the company and I knew some of the things we had planned for the future and I was excited about them, I was sure we would all get tremendously wealthy.

All I needed was a little reassurance. So one day I found myself in a room alone with the president of the company. I told him how excited I was for our future growth, and how confident I was that our stock would soon be shooting skyward. I told him how I was going to take every dollar I could get my hands on and buy stock, and I was going to encourage my friends and family to do the same thing.

Then I asked him: "This would be a good time to buy stock in the company, wouldn't it? I mean, the stock is going to go up, isn't it?"

He looked at me incredulously.

"This is a joke, right?" he asked, looking around to see if anyone was watching. "Did someone put you up to this? I mean, you aren't really asking me this question, are you?"

Suddenly, I wasn't sure.

"Well, I was just wondering . . . I mean, I know you can't guarantee anything . . ."

"Joe, stop!" he said firmly. "This is not a conversation that we can have. Do you understand that if I answer that question, and if you buy stock based on that answer, that you and I could both go to prison for a very long time?"

Whoa! Prison? I wanted to make money, not license plates.

The look on my face probably told him I had no idea someone could do hard time for buying stock. So he patiently explained the concept of "insider trading" to me. Then he said something that I've been thinking about a lot lately, especially with all the crazy stuff that has been going on in America's financial markets.

"I'm not going to tell you whether or not you should buy stock," he said. "But I will tell you this: don't invest any money in the stock market that you can't afford to lose."

Since I couldn't afford to lose the money, I never bought the stock. And that turned out to be a good thing. The stock that I thought was absurdly low went absurdly lower, and the company eventually went bankrupt. It was sad and painful for employees, executives and investors alike. But at least one person I know of didn't lose more than he could afford to lose.

Oh and he didn't go to jail for asking questions, either.

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--- © Joseph Walker


Look for Joe's book, "How Can You Mend a Broken Spleen? Home Remedies for an Ailing World." It is available on-line through