A random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

THE DEMISE OF THE NIFTY FIFTY
Security
Price-Earnings
Multiple 1972
Price-Earnings
Multiple 1980
Sony
92
17
Polaroid
90
16
McDonald’s
83
9
Int. Flavors
81
12
Walt Disney
76
11
Hewlett-
Packard
65
18
The Nifty Fifty craze ended like all other speculative
manias. The same money managers who had worshiped the
Nifty Fifty decided that the stocks were overpriced and made

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a second decision—to sell. In the debacle that followed, the
premier growth stocks fell completely from favor.
THE ROARING EIGHTIES
The Return of New Issues
The high-technology, new-issue boom of the first half of
1983 was an almost perfect replica of the 1960s episodes,
with the names altered slightly to include the new fields of
biotechnology and microelectronics. The 1983 craze made the
promoters of the 1960s look like pikers. The total value of
new issues during 1983 was greater than the cumulative total
of new issues for the entire preceding decade. For investors,
initial public offerings (IPOs) were the hottest game in town.
Take, for example, a company that “planned” to mass-
produce personal robots, called Androbot, and a chain of
three restaurants in New Jersey called Stuff Your Face, Inc.
Indeed, the enthusiasm extended to “quality” issues such as
Fine Art Acquisitions Ltd. This was not some philistine
outfit peddling discount clothing or making computer
hardware. This was a truly aesthetic enterprise. Fine Art
Acquisitions, the prospectus tells us, was in the business of

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acquiring and distributing fine prints and Art Deco sculpture
replicas. One of the company’s major assets consisted of a
group of nude photographs of Brooke Shields taken about
midway between her time in the stroller and her entrance to
Princeton. The pictures were originally owned by—this is
absolutely true—a man named Garry Gross. While Fine Arts
saw nothing wrong with the pictures of the prepubescent
eleven-year-old Brooke, her mother did. The ending, in this
case, was a happy one for Brooke: the pictures were returned
to Gross and never sold by Fine Arts. The ending was not
quite as blissful for Fine Arts, or for most of the other new
issues ushered in during the craze. Fine Arts morphed into
Dyansen Corporation, complete with gallery in the glitzy
Trump Tower, and eventually defaulted in 1993 on a loan
made by—are you ready for this?—Chrysler Credit
Corporation.
Probably the offering of Muhammad Ali Arcades
International burst the bubble. This offering was not