Hardly an unpaid internship
When it comes to the financial markets, timing is everything. Imagine you discover a relatively unknown company right in your backyard, buy stock in it and sit back and watch its price go from the single digits to more than 150 dollars.
You're probably thinking that this only happens to Wall Street portfolio managers or retired people who waited a decade to see their wealth grow. But how about a senior in high school who wanted to go to law school and work for an oil company?
Dave Castleman '01 started out with a part-time job at Qualcomm -- a company now worth more than 70 billion dollars -- during his senior year in high school. Although Castleman would not disclose how much money he has earned in the past few years, considering that he owns stock whose prices have grown exponentially, the company's growth has not hurt his net worth either.
"The company was large, but it was not very well known," Castleman told The Dartmouth. "I worked there over the summer and realized that this was going somewhere."
Castleman then bought stock in the company with his own money, and he bought some more when he went back to work at Qualcomm during his freshman summer. The company then started to grow more quickly, and the extremely bullish market over the last two years didn't hurt either.
The secret to Qualcomm's success was dividing itself and spinning off divisions that weren't growing as quickly. Not only did the company's shareholders get more shares every time a division was spun off, but the company was able to focus on its core business.
The fast growth did affect the company negatively in some ways. For example, Castleman did not return to Qualcomm because the company was cutting many jobs.
"Sometimes if you think the company is growing too fast, it might end up being too big for itself," he said.
Castleman then went to amazon.com and amazon.co.uk before moving on to a startup with 90 employees called idrive.com. He noted many differences between working at Qualcomm and then amazon.com and idrive.com.
"Amazon was much more entrepreneurial than Qualcomm," he said, noting, however, that amazon.com is a much older company than the one where he currently works.
Although he continues to hold a significant amount of Qualcomm stock, Castleman said that daily fluctuations in the market do not affect him. "I look at it, but I look in the longer term. Any losses are just paper losses," he said.
He also cautioned against daytrading and buying stock on margin, because people can assume more risk than they can handle.
Stories such as Castleman's are becoming increasingly commonplace in the world of the good economic conditions and rising stock prices. Akamai Technologies, Inc., for example, started when a group of Massachusetts Institute of Technology professors and graduate students set out to find a solution to congestion on the Internet. The company, which started to hire MBA students, went public late last year with an initial net worth of 20 billion dollars.
Castleman admitted that he took a big risk when he decided to work for a new-technology company instead of going into investment banking or consulting. Looking at his stock portfolio, however, the risk was worth it.