When Briefing.com asked readers to submit stories of their own investing experiences one reader submitted a story of how his account grew from $89,000 to $865,000 in 1999. This reader, who asked to be identified as "King Midas," sent us his entire trading history for verification. We analyzed it to help you understand what it takes to get these kinds of returns. Here's what we learned.

First of all, here is what the account actually did in 1999.

Although not evident above, the margin account was maintained at very close to 50% for the entire year. Some of the stocks had restricted margin levels, lowering the leverage capability. For example, on 12/31/99, the buying power was only $107,000 and not $238,000 as you might expect.

In addition, more than $20,000 in margin interest was paid. This is the type of customer brokerage houses love.

The action was also very active, but it wasn't a daytrading account. For the entire year, there were 85 separate sales transactions, an average of 7 per month. Purchase transactions greatly outnumbered the sales, as positions were frequently established in 3 or 4 purchases, then sold at one time.

Total dollar volume in the account from sales was $1,864,672.17.

All of these results were verified by Briefing.com by reviewing the complete brokerage statement history of the account.

We can't easily describe the investment style that produced these results.

The traditional descriptions simply don't apply. This wasn't growth or aggressive growth investing. It certainly wasn't value investing. It wasn't really even momentum investing, as some positions were taken before the stock began its upward movement.

The only clear, consistently applied principle was a concentration on Internet stocks.

To achieve these types of results, the following principles were applied by Midas.

• Total leverage: complete margin. Whenever the account value rose, King Midas used the extra buying power of the account to purchase more stocks, either adding to existing positions, or starting new positions.
• Short-term trades: Very high turnover, but not daytrading. The shortest holding was one day. The average holding period was about two months.
• Takes profits piecemeal: If a stock rises, then stalls, Midas sells part of his holdings, usually.
• Positions dumped if the stock doesn't move. Midas tends to prefer to take a loss than wait for a stock to move. If it hasn't moved in a month, all of it gets sold.
• Focus on Internet stocks, mostly at the infrastructure level.
• No aversion to buying "overvalued stocks."
• No short positions.
• No options.

There were simply too many trades for us to list a complete history here.

However, the portfolio could only be classified as an Internet portfolio, dominated by the biggest names in the industry. The focus, however, was on infrastructure stocks. America Online (AOL) was present, but the other application level names (Yahoo, Amazon, Ebay) were not.

Here is a sample of the type of positions selected by King Midas, and sales strategy.

Here is a sample of the type of stocks purchased near the end of '99.

In addition, there were some long-term holdings, such as 1,000 shares of DoubleClick held for more than one year (so we didn't have the original position cost). But DoubleClick had risen approximately 10 times in the past year.

Other stocks, as examples of the sector selection, included: Inktomi (1,000), RealNetworks (500), Silknet (350), Vignette (500), Nortel (300), Acacia Research (1,000), and Puma Technology (500).

Midas knew and understood his stocks. All were key components of the Internet, mostly at the infrastructure level. Most are "retail" investments, where institutional buying is secondary. Cisco wasn't the type of stock Midas focused on.

If you had to summarize the Midas approach in one sentence, it would be this: as margin buying increased, Midas bought the "stock-du-jour" at that time. Although not a momentum approach, stocks on which the public was focused seem to get top priority, regardless of current valuation.

Sales were made either when the stock declined, or in pieces, when the stock's momentum slowed. If the stock's momentum didn't slow, it got held.

In general, it was the old adage -- sell your losers, let your winners ride -- applied monthly.

Despite his self-chosen name, however, King Midas didn't make money on every trade, nor did he always sell "correctly."

For example, King Midas bought 500 Metromedia Fiber Networks (MFNX) in July for $38 3/16, or $19,123.70, including commission. However, he sold them all in August at $27 3/4, for a total loss of more than $5,000. MFNX later traded for around $75, or double what King Midas paid.

On the other hand, there were losses taken, which prevented further losses. Midas bought 500 shares of Excite@Home (ATHM) on June 22 at $57 15/16. These were sold on July 19 for $47 5/8, for another loss of $5,000. However, ATHM  continued to decline from there. And decline, and decline and decline.

On the whole, however, the portfolio showed no aversion to taking a loss, a key component to its success. Dead money wasn't allowed to hang around.

The volatility in this portfolio was quite remarkable.

The portfolio did not go straight up all year. In early April, the original $90,000 had risen to approximately $450,000. But the market collapse in Internet stocks in April 1999, along with margin call sales, caused the account to drop all the way to about $150,000.

Undeterred by this extreme fluctuation, King Midas continued to buy new stock, on margin, when the markets again rose.

There was a lot of action in December, as Midas began buying actively early in the month, as his buying power increased. The account doubled in value in December alone. Half of the year's $800,000 gain occurred in December alone.

There were numerous margin calls at various times during the 1999 year. These calls were always met with the sale of stock, and not with additional cash inflows.

The largest margin call experienced by the account was approximately $70,000. This call actually happened when the brokerage increased margin requirements on some of the stocks in the portfolio, putting the account over the maintenance requirements. King Midas sold stock to bring the account into line.

Margin calls, however, didn't deter Midas from going back to the margin well, to its extreme, when the market again rose, increasing his buying power.

Before you get excited about following King Midas' approach, be sure to take taxes into consideration.

We did not take the time to calculate the tax impact of this approach, but with none of the year's sales falling into the long-term category, you can roughly count on taxes eating into 40% of the total gain.

We were able to verify the success that King Midas claimed. The 852% return of his portfolio is real.

This means that the "folklore" of the market can be done. A ten-bagger in one year is possible.

When Midas told us this story, his portfolio stood at $1,138,866.52, a full $272,000 more than the end of the year. That made a year-to-date return, after margin, approximately 31%.

But the approach used by King Midas is extremely dangerous. The only thing that made this approach work is a hot marketplace.

The maximum margin, hot stock approach isn't for everyone. You must tolerate loss, and be undeterred by margin calls and moves against you.

Above all, it isn't the type of approach for your retirement money, under the assumption that you will be able to retire earlier, by playing this type of game.

Even if you won, such a strategy would not be smart.

After all, we don't salute the drunken driver who makes it home safely. Maximum risk with money you can't afford to lose falls into the same category.

But, if you are wondering what is driving this market, look no further than investors like Midas. With the risk pedal fully pressed to the floor, investors like these, making large concentrated bets, are driving the market. The decline in the Dow and broader market is of no concern.

After all, for many, including Midas, there is still a feeling that they are still playing with "house money."

Robert V. Green