First flush of youth
Phillip Morris and other tobacco stocks had just been knocked down on the first health scare. MO had dropped from about $45 to $31 where I bought it. They paid an annual dividend of $3.00 so the yield was almost 10%. Banks were paying 2%. I was also impressed with the fact that they were the sponsors of "I Love Lucy", the most popular show on TV at the time. I smoked back then and I doubted that many people would quit because of this scare. My friend bought Dow Chemical. Later on, I sold the Phillip Morris when it went back to $45. Since then it went from the number five tobacco company to number one and split 3-1, 2-1, 2-1, 2-1, 2-1 and 4-1 so my original 10 shares would have been 3,840 shares today had I held on to them.
This says a lot for the value of Long Term investing if you are in the right stocks. My friend, who never sells stocks, still has his Dow and that stock split 3-1, 2-1,3-2 and 3-1 so he has done well there. We see each other once in a while on the Basketball court.
In a fantastic thing for me, my friend in the Brokers Loan Department told me about a stock called Missouri Pacific Preferred. He told me how the Railroads were going through reorganization bankruptcies. It seemed that many years earlier "Robber Barons" who ran the big railroads in which they owned only small % stakes, would force them to BUY up little tiny railroads in which they owned 100%. This saddled the big railroads with tons of debt, which eventually made them seek protection. I bought 20 shares of Mo Pac Pfd at $12 a share and in virtually no time at all, the stock was selling close to $60. One day, it dropped $5, and I got scared and sold at $52 for a $40 a share profit, or $800. The stock later went over $100. Later on, I found out that my teacher Leon Levy had also made a lot of money on this one.
I also made a little money playing pinochle at the bank. We used to play every day in the lunchroom and settle up every two weeks on payday. I never had to pay even once. This is mentioned because gamesmanship is very important in the stock market. In addition to the $40 salary, which had been raised a couple of times, everyone also got a nice free lunch every day. We would also get overtime once in a while when the market was down and we priced the portfolios. They also had an Xmas bonus and a stock plan so I also got to own a few shares of Hanover stock. This was a good time for me, when a free lunch really was free!
In 1955, my friends pushed their names up in the Draft and I did that too. On June 20th 1955, I went into the Army. At the time I held conservative stocks like General Foods and Long Lighting and others, but the week before I was inducted I bought a stock called Lion Oil.