Perhaps, right after the Series 7 license, Bear Stearns should add Mavis Beacon Teaches Typing to its list of requirements for clerks and brokers.

Making an unfortunate "typo," a clerk entered an order to sell nearly $4 billion worth of S&P 500 securities yesterday, when the order should've been $4 million. Um, oops! Unfortunately, NYSE's software program doesn't offer an "Undo" function.

All but $622 million of the orders were canceled before execution, according to the exchange, and Bear Stearns will try to cancel the rest today.

Memo to clerk: You're clearly tired... oops... fired.

The big order didn't affect the S&P 500 today, which barely budged. The FOOL 50 was down 0.2%.

In today's Motley Fool Take:

Goldman Sacks Investors

Another Wall Street securities firm is taking its place on the hot seat today. The House Financial Services Committee says Goldman Sachs(NYSE: GS) gave executives at 21 companies the chance to buy hot IPO shares in exchange for lucrative investment-banking business -- a practice known as "spinning." Earlier this week, Citigroup's(NYSE: C) Salomon Smith Barney was accused of the same thing.

The executives receiving IPO shares, according to the committee report, included eBay(Nasdaq: EBAY) CEO Meg Whitman, Yahoo!(Nasdaq: YHOO) co-founder Jerry Yang, former Enron Chairman Kenneth Lay, and former Tyco(NYSE: TYC) CEO Dennis Kozlowski. The Wall Street Journal says Whitman and Yang each received stock in more than 100 IPOs, "and quickly resold many of the shares at a profit." What kind of alleged back-scratching did Goldman receive in return? Eight million dollars worth of investment-banking business from eBay, for starters.

The real issue here is how small investors were used as pawns at the height of the bubble. "These initial public offerings seemed to be anything but public," says Rep. Richard Baker (R-La.). "A small circle of preferred clients were given vast access by the investment banks to IPO shares and reaped large profits." Meanwhile, individuals had to wait until the shares were traded on the open market, usually at much higher prices.

Goldman vehemently denies the charges, calling the allegations "an egregious distortion of the facts." Whatever the specifics of this particular case, it's clear the IPO process was generally rigged to favor the fat cats at the expense of individual investors.

Quote of Note

"Ambition drove many men to become false; to have one thought locked in the breast, another ready on the tongue." -- Sallust (86 BC - 34 BC), The War with Catiline

Investors Look Bear in the Mouth

A survey released by the Investment Company Institute and the Securities Industry Association (trade groups for financial services firms) claims that 84.3 million Americans now own equities, either through mutual funds or individual stocks. That's up 7.1% from 1999, the last year of the bull market.

If these extrapolations derived from interviews conducted with 4,009 "financial decision-makers" last January are accurate, more Americans are seeing the current bear market as a buying opportunity than a reason to flee.

One reason for this is the decidedly long-term outlook of most investors: 96% of investors said they were in for the long haul, and 86% characterized themselves as buy-and-hold investors. Nearly the same percentage of respondents reported making a stock transaction in 2001 (40%) as in 1998 (42%) -- even though 2001 was a down year for equities, and 1998 was up.

However, it appears people aren't venturing into the market alone. Of those surveyed, 58% said they rely on professional financial advice, and 45% said they bought a mutual fund through a full-service broker, up 33% from 1999.

Other tidbits:

  • For nearly half of investors, the value of their equity assets is less than $50,000.
  • A whopping 89% of equity investors own stock mutual funds. Almost half (49%) owned individual stocks.
  • Most investors aren't new to the market: 44% first invested before 1990, and 26% entered between 1990 and 1995.
  • Americans are getting more conservative with their money: 36% indicated they invested in bonds, up from 22% in 1999, and those investing in money markets increased from 26% to 35%.

We applaud equity investors for having a long-term perspective; if you need the money in less than five years (perhaps even longer), look for alternatives to stocks. However, it's a bit disconcerting that more people are investing in mutual funds through full-service brokers, which means these folks are paying often-significant commissions.

Of course, it's only fair to compensate brokers for their services; if your advisor has made you a wealthier person, then it may have been a commission well-spent. But considering that the median income of an advisor in 2001 was $110,025, according to the Financial Planning Association, advisors are well-compensated for their expertise. Many investors would do just as well (if not better) by bypassing the middleman broker and investing in a no-load index fund.

There's nothing wrong with paying for financial advice -- as long as you're getting your money's worth.

Shameless Plug: TMF Money Advisor

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AMD : Another Massive Disappointment

So much for the feel-good-lovin' in personal computing. As soon as direct-seller Dell(Nasdaq: DELL)raised industry hopes by projecting an 8% to 9% spike in unit shipments, Advanced Micro Devices(NYSE: AMD) let the air out of the optimism.

The chip maker is at it again. As the world's No. 2 microprocessor company, AMD is now talking analysts off their $614 million third-quarter revenue target. A lack of demand, made worse by hard hits on the company's high-end, high-margin chip business, is to blame for AMD's expectation of a substantial loss on just $500 million in revenue.

It wasn't paradise for the company even before it got hosed down. Before the latest talk down that now finds Wall Street scrambling to extend the profitability finish line, AMD was projected to continue to report losses until at least 2004. What's troubling here is that we're back to the days of densely foggy corporate visibility. In July, AMD expected to show sequential top-line improvement for the quarter. It's not going to happen.

We knew Dell was a unique case. Its gains were made at the market-share expense of others. While market watchers can cross their fingers and hope Intel(Nasdaq: INTC) fares better -- widening its substantial lead over AMD -- we all know how assumptions have been burned before. AMD is still holding the match.

Discussion Board of the Day: AMD

Will AMD get back on track, or will we be reporting another shortcoming in three months? Do you agree with Community member thegenx and his Top 10 Reasons AMD Warned? All this and more -- in the AMD discussion board. Only on

Quick Takes

Non-veritas. Veritas Software (Nasdaq: VRTS) CFO Kenneth Lonchar resigned after his alleged Stanford University M.B.A. degree turned out to be only that -- alleged. In a classic example of failure to take responsibility, Lonchar said in a statement released by the company, "I regret this misstatement of my educational background." "Misstatement"? The guy lied, end of story. Company stock dived 18%.

Non-offer. Former Chairman Gary Winnick of bankrupt telecom Global Crossing has reportedly offered $25 million to an employee fund. Lawyers for employees and politicians have roundly criticized the figure as inadequate -- "off by a magnitude of 10," according to one. Winnick sold $578 million of Global Crossing stock prior to the company's bankruptcy.

Non-approval. The FDA has delayed action on Transkaryotic Therapies(Nasdaq: TKTX) Replagal treatment for Fabry disease due to concerns about the data. Fabry disease is a genetic disorder affecting 5,000 to 10,000 people in whom the inability to process fats leads to organ degeneration. Under the Orphan Drug Act, the FDA grants a seven-year monopoly to the first drug approved for such a rare condition. Transkaryotic and Genzyme General(Nasdaq: GENZ) are competing for the prize in a market estimated at $500 million a year. Transkaryotic shares tanked almost 60%.

Non-spine. Poor WorldCom. Its East Coast communications backbone went down today, causing major connectivity problems nationwide. While we may wish swift and strong justice for ex-CEO Ebbers, Sullivan, and their gang, we have no ill will toward WorldCom's current operations. Moments like these remind us how dependent we've become on the Web, and we wish WorldCom a speedy system recovery.

Non-surprise. Don't miss our Take above on Goldman Sachs IPO allocations to customers!

And Finally...

Today on Rick Munarriz learns a lesson about "greatness" from the NFL.... Tom Jacobs questions ARM Holdings' suspiciously late revenue warnings.... In Fool's School, the difference between APY and APR.... Our Community discusses if there's a smoking gun in Cisco's 10K.

Bob Bobala, Robert Brokamp, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Jackie Ross, Reggie Santiago, Dayana Yochim