To understand why many individual investors were dumping America Online stock last week, you have to understand why they once bought it: It was the stock for all reasons.

It was a growth stock, a great one. It was a speculative stock, a safe one. It was hot but harmless--predictably up, predictably down, but always up again.

It was a toe in the water for the timid. I know many people for whom AOL was their only "Internet stock." It was their piece of the revolution, a fling on the wild side.

Buying it early was not only an act of faith. It was an act of rebellion, too--against the preachy pros who said they were fools to be in this sector at all. Investors knew better. AOL was in their homes. It was the retail stock for the retail investor.

Indeed, its success as an investment symbolized the triumph of the individual investor more than any other equity.

What's changed has nothing to do with whether the big deal with Time Warner was a good deal. AOL is suffering from wilt by association.

AOL stockholders once had an aggressive Internet company. Soon they will have an Internet-news- entertainment-cable-movie conglomerate.

I am one example of why investors loved AOL. Before I worked as an editor in this newspaper's business section, when company ethics did not bar me from owning shares of any local company or speculating in any, I did a little quick buying and selling. I speculated in particular in Internet stocks because with some predictability they would go up 10 points and down 10 points and then back up again 10 or 15 points--in a week or two weeks.

I could buy a hundred shares. Make a thousand bucks. And then do it all over again.

Call me foolish. Call me irresponsible. Call me shortsighted. But that's how we paid for the new room on our home. Would a loan have been better? For the record, I also used the money I made to buy long-term growth stocks, which is what we all should be doing, of course. I cannot responsibly recommend that anyone speculate.

But I admit that I did it, the old-fashioned way, one stock at a time. I did it only in amounts I could afford to lose. Moreover, I tried to choose companies that, if worst came to worst, I wouldn't mind holding if the music stopped. Basically I was chicken.

AOL was perfect for chicken speculators. It had revenue. It had earnings. It had a board of directors that includes Colin Powell, for goodness' sake. What could be wrong with that?

AOL never allowed the price to get too high. It split a lot, roughly once a year over the past six years, permitting people to buy in lots of a hundred or two hundred or a thousand. That's not really important. A stock costs what it costs whether or not it's split. But it's psychologically important because it satisfies that innate desire to buy in round lots of hundreds--easier to count.

AOL offered deniability, too, should I need it. "Dot-com stock? This is no dot-com. It's the S&P 500."

Yet, for friends who thought I should be on the cutting edge, it was a dot-com. Sure I'm into the Web, I could say. You think I don't "get it"?

You didn't have to get it to make money off of AOL. Its price has appreciated roughly 1,200 percent since September 1997. AOL was not only a good speculative stock, it was a fantastic growth stock. Gratification delayed, perhaps, but never denied.

Now I admit that it wasn't just money that drove me. It was a kick. It was also, as I said, a little rebellious. I could imagine all the gurus on Lou Rukeyser's show sitting around condemning me. Look at those price-to-earnings ratios. Look at those multiples. What sort of idiot would buy that stuff?

What the befuddled experts don't understand about small investors and the Internet is that rebellion craves condemnation. Thus, the more the experts warned of the dangers, the more fun the danger became. The higher the multiple, the more daring it all seemed.

Deep down inside, I suppose, once I got beyond all the talk of new economies and new paradigms, it made me feel, well, wild. This is pathetic, I know. But that's precisely my point. Middle-aged guys want to be bad, but at heart, most of us are too good to be bad. Here was a stock that was good and bad simultaneously.

And now what will we have? I have no idea.

How many people could even say what Time Warner owned before the big announcements, besides Time and Warner? What does it mean to be an Internet-news-entertainment-cable conglomerate? And I forgot the sweepstakes AOL will now operate. Time Inc. owns 50 percent of the holding company that runs the infernal American Family Publishers sweepstakes, now in Chapter 11 bankruptcy after dozens of lawsuits.

So it's going to be an Internet-news-entertainment-cable-sweep-stakes conglomerate, complete with Dick Clark and Ed McMahon.

You've got mail, Steve Case: You may have already won . . .

Fred Barbash ( is The Post's business editor.