FORTUNE — In the late 1990s, an ad agency creative director I’ll call Joe Smith to protect his privacy bought several hundred shares of Apple (AAPL) at $60 apiece. Last fall, at age 42, he found himself out of work and increasingly dependent on the value of those shares to make ends meet.
Following the lead of a 33-year-old investment advisor named Andy Zaky who had written that Apple was going to $750 by January and to $1,000 within a year, Smith converted most of his Apple common stock — more than he should have — into high-risk Apple call options. When those options expired in the third week of January with Apple trading below $500, they were worth exactly zero. Smith had lost roughly $400,000 and all his Apple shares.
A lot of people lost a lot of money when Apple went into the extended downward slide that just entered its sixth month. And there were plenty of other experts saying all along that the stock was undervalued and ready to bounce. But Smith’s story — and the story of hundreds of other investors who were following Andy Zaky’s so-called Apple model portfolio last fall — hold a special poignancy for me. Not only did these people get some spectacularly bad advice, but they got it from someone whom I helped make famous.
I’d been writing about Zaky since the fall of 2008. I’d covered his earnings predictions, his buy and sell calls, his critiques of competing fund managers. I’d eaten dinner with him, toured him around my Brooklyn neighborhood, introduced him to my wife.
So I feel a personal and professional obligation to find out what went wrong.
Fantastic article, Dr. Fly. I have a few friends who bought into the hype and went long on AAPL at $550 to $600 a share last year. I’ll share this article with them in an attempt to explain that things could have been worse.