Out of interest (I know you're dying to know), here's what Microsoft shares did over a 10 year period...

As you can see, in the famous words uttered by every stock broker...

"The value of your investments can go down as well as up"

The percentages, by the way, are the rise and fall relating to the '94 price.

The '94 price was actually up 240% from when the stocks opened for trading on 13 March 1986 (opened at $25.50).

To put that into perspective...

Even the mighty Microsoft has had it's share of ups and downs.

It's shares went on sale in 1986 at $25.50

It Peaked in March '99 at about $165.00 (+560%)

And it closed at the end of 2003 at $27.37 (+8%).

But...

Ahhh, there's always a "but" - and in this case it's a big BUT.

Whilst you may think that from it's peak in '99 it has lost 511% of it's value,

And that after 17 years the value of Microsoft's shares have only grown by a measly 8%.

It hasn't.

It's fairly complicated,

But in the 17 years that Microsoft shares have been trading there have been at least four (4) 2:1 splits.

That is, in simple terms, the company issued an equal number of new shares on the basis of 2 new shares for one old share.

And they've done that at least 4 times.

And if my maths are correct, the true value of 1 original Microsoft share is now roughly $765.00 and not $27.37 as it seems at first sight.

And if the value of each share has not gone up by much, then the number of shares that Mr G now holds has gone up in the same way...

Making him the wealthiest man on the planet.

A rise of 3000% in the value of Mr G's original stake in the company.

Simple, eh?

Shall I go on?

No?

Thank goodness for that.

The bottom line is that even though on the face of it, Microsoft's shares are only up 8% over 17 years, because of the splits and the extra shares that Mr G is holding - he is very definitely the wealthiest man on the planet.

And it's all thanks to the stock market (as well as the excellence of Microsoft and it's products - there, I had to say that didn't I?)

That's the good news.

The bad news though, is that the value of shares can indeed go down as well as up...

As anyone with shares in Enron and Worldcom and others can tell you.

Ah, Enron, Worldcom and others...

And there were lots of them.

Companies who's senior executives sold off their shares whilst their companies were "bombing", and who with the collusion of stockbrokers and analysts were encouraging private investors to buy those self same shares that the execs were selling.

That was 2002 and yet with the stock market trying to recover, it seems so long ago.

And these were companies that subsequently lost up to 95% of their value (and 100% if they folded completely).

Below is a press release from Fortune Magazine in the US which tells you all about it...

PRESS RELEASE

FORTUNE NAMES NAMES IN REPORT ON "INFECTIOUS GREED" IN CORPORATE WORLD

List presents 25 companies whose top executives took millions-sometimes billions- as their companies were going down

New York, August 12, 2002-

Lately the public has been treated to a lengthening parade of corporate villains, examples of the "infectious greed" that Federal Reserve chairman Alan Greenspan recently described to Congress.

These "cash-out kings" made millions selling stock even as their companies were tanking. In "You Bought, They Sold," FORTUNE looks at the 25 companies whose officers and directors took the most money-as much as $2.26 billion-as their companies lost 75% or more of their value, and at how this avarice suffuses the business world far beyond Enron, Tyco, and WorldCom. The story appears in the September 2 issue of FORTUNE, available on newsstands August 19, and at www.fortune.com as of August 12.

"The not-so-secret dirty secret of the crash is that, even as investors have lost 70%, 90%-even, in some cases, all of their holdings-top officials of many of the companies that have crashed the hardest have gotten immensely, extraordinarily, obscenely wealthy," says FORTUNE senior writer Mark Gimein.

"They got rich because they were able to take advantage of the bubble to cash in hundreds of millions of dollars' worth of stock-stock that was usually handed to them via risk-free options-at vastly inflated prices. When the bubble burst soon thereafter, their shareholders were left holding the bag."

To make the list-compiled by FORTUNE with the assistance of Thomson Securities Data and the University of Chicago's Center for Research in Securities-FORTUNE looked at companies that had hit a market cap of at least $400 million-and fallen by at least 75% from the highs they reached during the bubble years.

Insider stock sales from 1999 onward were counted; this included only stock sold by top executives and board members. The quick profits made by the venture capital firms that funded the dot-com boom were excluded. "What we cared about, ultimately, was a simple, straightforward thing," says Gimein. "How much cash did the top executives at America's Losingest Companies reap by selling their shares to the investing public?"

How rich did they get? "The numbers are astounding," says Gimein. Executives and directors of the 1,035 corporations that met FORTUNE's criteria took an estimated $66 billion. Of that amount, a total haul of $23 billion went to some 466 insiders at the 25 corporations where the executives cashed out the most.

Topping the list is Qwest Communications, whose executives cashed out $2.26 billion. At No. 2 is Broadcom, with a haul of $2.08 billion. AOL Time Warner (parent company of FORTUNE) comes in third, with executives cashing out to the tune of $1.79 billion. At the bottom of the list is Vignette, with a take of $413 million.

"For the ordinary investor," says Gimein, "it is nearly impossible to look at this list and not feel ripped off. In some cases insiders clearly cheated the investment community to realize their gains-by ginning up revenue numbers that have turned out to be phony. But even putting these cases aside, the billions of dollars of insider sales make absurd many of the rationales executives used to justify their new wealth.

Take, for instance, the notion that executives were being rewarded for performance. Plainly, the executives on this list did not perform. They failed miserably; in many cases they failed even as they were bragging about how well they were doing and how much their stock would rise."

"Nobody's saying that founders or CEOs shouldn't have been able to take a little money off the table," concludes Gimein. "But this wasn't a 'little' money-$66 billion is a huge sum, and the anger it has generated seems, quite frankly, justified."

Yes, it was rather long. But worth reading in full for all that.

And if you want to read more about it, click on the links below.

The first link is the full article and the second link is list of the companies, execuatives and amounts sold.

You'll see some B I G household names in there, as well as the so-called "bad guys"...

You Bought. They Sold. A tale of corporate greed

Fortune magazine's list of companies, execs and amounts of money removed

And to stay on the same theme...

Below you'll see a graphic, courtesy of Stockcharts.com, which shows how Enron's price was falling and yet the stock brokers and analysts were still keen for you to buy it and kept issuing, as you see, buy recommendations.

In case you're not aware of these things - prices rise on the stock market when there is an excess of demand (people buying) and they fall when there is an excess of supply (people selling or not buying).

There was a technical warning signal on 20 Nov 2001 when the price was at about $80.

Don't worry about the technical warning signal, but you can see where the green "hills" at the bottom of the graph dropped below the line to go red.

That was the warning signal and you'll see the "hills" stayed below the line from there on in.

The analysts recommendations are shown in little boxes as the price fell away to almost zero.

You'll also see that the first warning from a major analyst came 11 months later when the value of Enron had fallen by 75% to $20.

And believe me, psychologically one of the hardest things to do is to sell a stock when it is in a "loss situation".

How do I know?

Because I read it during my research - but more of that later.

Check out the Enron story.

But before you do, one last point.

As Enron was going bust some of America's biggest pension funds were still spending your money to buy Enron stock.

Good eh?

Check it out...

 

The fact of the matter is the stock market is infected with greed and self interest.

It is also full of "experts" and "professionals" who quite frankly don't know what they're doing.

And for that reason it's probably best left alone (unless you fulfil the criteria mentioned earlier on this page).

There are hundreds of thousands of shares out there and I for one don't have a clue which one is going to rise or fall, and I also don't have a clue about where the stock market will be in a few months or years time.

Anybody who tells you they do, is lying or worse - guessing.

Those are the 7 reasons why I think (I know) you need your own ultra profitable home business.

I hope it made interesting reading and you're now "enthused" to at least think of doing it yourself.

Remember what Picasso had to say...

"I'm always doing things I can't do. That's how I get to do them."

But there are thousands of home businesses out there, so what makes the perfect one?

Click on the link and see exactly what makes the Perfect Home Business...

Alternatively, now you know of 7 reasons to have your own work from home business, why not check out 7 popular ideas for a home based business by following the link to the TriggerSystem web site