NEW TECHNOLOGIES PRODUCE UNPRECEDENTED OPPORTUNITIES 205

the next 30 months. When the market moves up strongly like it was doing
in the first part of 1997, there are many opportunities to latch onto big lead-
ing stocks that are being accumulated by big money funds. And that was
exactly what was happening, just as we’ve seen in past upward-trending mar-
kets. One mistake that Roppel made in 1997 was when he took a position in
Siebel Systems, Inc., in June. Roppel knew the company well, and it had impres-
sive fundamentals and was in a major leading group — software enterprise.
Its customer-relationship management software program was being adopted
by many large organizations, and Seibel was reaping the benefits of strong
revenues and earnings. As it broke out of a cup-with-handle pattern he
bought in at $27 to $30 per share (adjusted for a three-for-one stock split).
He went in with a huge position and was leveraged on full margin. Having
taken his biggest position yet he was too nervous when the stock quickly
pulled back in what turned out to be a normal minor fluctuation. He then
quickly unloaded his full position and ended up losing about one point on
the transaction. Seibel went on to be a huge winner. Roppel would learn from
this, as we’ll see later, but that is one of the traits of the best traders — they
always remember their mistakes so in the future they try not to repeat them.
As we get back to the markets’ action, recall that when the markets rise
very fast over an extended period of time it usually means that a top may be
just around the corner. In 1997 the Nasdaq was leading all indexes as it raced
up to hit over 1,700 in early October. The Dow had slowed down somewhat
and traded in a choppy fashion during August and September. After normal
pullbacks in mid-October, the markets were hit with some international
issues that sent them down hard. During the summer of 1997 overbuilding
in Asia caused excess capacity, and the Thai Baht declined 12% against the
dollar. Other devaluations soon followed, and as the “Asian flu” spread, it
was feared that U.S. companies doing business in Asia would get hurt. This
expansion of globalization to the Pacific Rim would then begin to stumble
as the fast growth track that it had been on began slowing down. A near
panic ensued as the U.S. markets then reacted to this crisis. On Monday,
October 27, the Dow would fall 554 points, or over 7%. It would be the
largest point loss in the Dow’s history, surpassing the crash in 1987. But the
markets soon recovered, as the crisis did not have as much of an impact as
most had feared, and the U.S. economy was still very strong and for the most
part unaffected. As many also looked to the U.S. for growth, they would find