Going for the sure thing
The Facebook fiasco brought me back to childhood, when I got my first lessons in the stock market.
My father was a Jewish working-class investor, with sugar plum fortunes dancing in his head. Unfortunately, that’s where they would remain for most of his life.
But when I was 9, I remember him touting a “sure thing” — United Park Mining.
“That stock is going places,” he said of the Utah company, selling for about $1.67 a share. “It will go to 5 by the end of the year.”
That year was 1958, and I envisioned us welcoming the New Year with champagne toasts to Guy Lombardo rather than the grape juice I was allowed at that age.
“You think it’ll go up that much?” I asked.
“Good as gold,” my father said of the mining company.
My brother Malvey, then 16, was a believer. He had purchased 50 shares on his own from money saved from his earlier days as a newspaper delivery boy.
This could be the beginning of the Elkin Empire; I thought of how I would be the envy of my fellow fourth graders.
I did my math quickly: At 50 cents a week for allowance, my options were limited. It would be 1960 before I could compete with my brother.
But he saw my interest, and ever the entrepreneur, he came up with a deal. “I’ll sell you one share at $1.67,” which I would have, given how much I had already saved, if my father would advance me a week’s allowance.
There’s always a “but” with big brothers.
“I’ll be charging you one-eighth percent sales commission, which is what the brokers do — just to make it official, of course.”
I couldn’t do the trade fast enough. What happened if UPM — I was an expert by then — went up to $2 the next day? I’d be out of luck — and a prosperous future.
I got the advance from my father, dumped the coins in my brother’s lap the next day — including the commission — and asked for my stock certificate. (This was a time when they actually issued certificates of sale.)
“I’ll write you out one, but to get a real certificate you have to buy more than one share — like me,” Malvey boasted.
He wrote it out on loose-leaf paper from his school book, signed the “certificate,” and my father witnessed it.
“Deal,” Malvey said, extending his hand.
I shook it, anticipating the fortunes that awaited me.
Let’s see, in a month, I could buy another share; better yet, in two weeks, maybe I could buy half a share from my brother — if it wasn’t 5 by then. Or maybe I could get a bigger advance from my father and then buy two shares and —
And then United Park Mining, my golden buy, started going down.
It dropped to $1.50, then, three days later, to $1.37, then, the end off the week — $1.25.
I knew what I had to do.
“I want my money back,” I demanded of my brother.
“It doesn’t work like that,” he informed me for the first time.
“I’ll go tell Pop,” I threatened.
“Don’t bother him; he’s upset over how much he’s lost himself.”
“But it was a sure thing.”
“There’s no such thing as a sure thing,” said Malvey with something of a too satisfied smile.
It was the first lesson I got in the market if not in life. “You got greedy,” he said, still smiling.
Who was he? The anti-Gekko of the ’50s? (It would be six years before I “gambled” with him again, this time with $3 — I had a bigger allowance; surely, Liston pummeling Clay was a no-brainer.)
I sold UPM the next week at a loss; I couldn’t take the pressure. By then, it was at $1.
Malvey slowly counted out the coins. “Wait, it’s only 88 cents you gave me!”
“You forgot the commission,” he said.
Was it a lesson I would never forget? Of course not: Hello, 1987; goodbye to dreams, 2008.
And then — surely, Facebook was a sure thing.
I bought, I bit — I screamed.
As the stock tanked, I knew what I had to do.
“I want my money back,” I told my broker.
And you know, United Park Mining never hit 5 either.
Michael Elkin is a writer living in Philadelphia.