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Elderly Couple Fooled the Stock Market

by Magnus Erik Hvass Pedersen, March 15, 2014

An amusing and true story from Denmark about the uninformed and irrational stock market.

On October 20, 2010 the previously unknown investor Mrs. Anni Eriksen bought more than 5% of the shares in the small Danish company SCF Technologies for a total amount of DKK 123.250 (approximately USD 23k). The stock was trading at a very low price because the company was facing bankruptcy.

It was actually the husband Mr. Børge Eriksen who made the investment in his wife's name. "My wife isn't interested in that sort of thing. She just thinks I'm crazy." Mr. Eriksen doesn't have access to the the internet, he doesn't read the newspapers and his only source of information is the Teletext service on his TV. Mr. Eriksen explains: "I'm sitting here reading the Teletext and follow the stocks every day. I can see how they jump up and down. All stocks do that all the time. When they've come down a lot then you buy some because they'll go up again some day. I saw that this particular stock had fallen pretty good. So I thought we'd give it a go. I then drove down to my bank and they helped me buy some."

Before it became publicly known that the new major shareholder was in fact an uninformed elderly couple, the internet was buzzing with rumors that someone had insider knowledge about the company's turnaround. This sent the stock up and Mr. Eriksen sold his shares with a 170% profit. "I had no idea the company was facing bankruptcy. I don't think that was mentioned on the Teletext. But it's a nice profit for only a week."

This was the third stock investment in the life of Mr. Eriksen.

Sources (in Danish)

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