NEW YORK (CNN/Money) -
When it comes down to it, most of us don't share a lot of common ground with Martha Stewart. We don't hang out with the same sorts of people, we don't live in the same sort of digs and the idea of dropping thousands of bucks on a handbag is beyond us.
Mostly, she's so damn accomplished -- the reason so many people admire her and so many other people hate her.
But plenty of investors can relate to Martha in one area: She didn't follow her own best advice.
An e-mail Stewart sent to Merrill Lynch broker Peter Bacanovic in November 2000, read Tuesday at her trial, went like this (we've neatened it up with capital letters and such, because Stewart would like it that way):
"The account is a mess, as is the pension account. I think it's time for me to give my money to a professional money manager who will watch it when I am too busy and will take a bit more care. We have just watched the slide and done nothing and I'm none too happy."
Considering how much more the market was going to fall, getting out in November 2000 would have been a fine thing.
But even ignoring what was then the unknowable future, having a money manager look after her money, rather than a stock broker, would probably have been a good idea for Stewart. Because it almost always is.
What would a money manager have done with the stock portfolio of a woman on the verge of 60 -- a portfolio chock full of not just ImClone, but stuff like Amazon, Lucent, Doubleclick and JDS Uniphase?
That's right, a good money manager would have sold the whole thing. Put her into mutual funds and, considering her age and her already huge stock market exposure through her stake in Martha Stewart Living, probably put a lot of her money into bonds and cash. The ImClone affair wouldn't have happened.
But for Stewart to sell would have been for her to admit that even though she's so accomplished, and even though as a former stock broker herself she was supposed to be a savvy investor, she'd made a big mistake. And it would have meant giving up on the possibility of the market snapping back and bailing her out of her big mistake.
Raise your hand if this sounds familiar.
So Stewart didn't go with a money manager, choosing instead to stick with Bacanovic -- a guy whose job as a stock broker meant he would have a difficult time telling a client it was time to diversify out of stocks. The losses kept coming, of course.
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