A penance parable, or

My 1st stock market rocket ride, or, Perception v. reality

I was just a boy. When cars had still hydramatic transmissions, bias ply tires and mohair upholstery. When planes still flew with oily noisy piston engines and big shiny spinning propellers. When the Nickel Plate Road still used steam engines to pull their passengers through the back hills of Pennsy on the railroad between Hoboken and Chicago.

In the mail came a big manilla envelope. Addressed to me. From my rich Uncle in Cambridge. It said “Happy Birthday” on the back. I eagerly tore it open, expecting the latest Uncle Scrooge comic -- or a new Everly Brothers’ 45 rpm record.

But, what a disappointment. For, inside was a curious looking orange yellow piece of parchment. With ornate engraved illustrations. It said “1000 shares.” And my name was stamped in a big blank spot. My mother told me it was stock certificate and not to loose it.

When my Uncle later came through on his way to Florida he told me I now owned shares in a company. He showed me how to go to the library and look up the price of the shares. It was huge fine newsprint list called “Over the Counter”, but halfway down, there it was. The company name and closing bid and ask of the prior day: $4.00 and $4.10.

Now what my Uncle had invested me in was an obscure regional bottling company. They held the franchise, the exclusive right to bottle and distribute, for a soft drink company in central Florida. And this was a distant time when the human population of central Florida only barely outnumbered the alligators, the egrets, and the orange trees.

For quite while I would dutifully traipse to the library and look at the price. But nothing much happened. It would go up a little. Then down a little. After a few years it had gone up to maybe $5.50. I don’t really remember because I lost interest in it and stopped the library visits. Watching the Brooklyn Dodgers on our Sylvania was more exciting. Duke Snider was my hero.

Then some time later a funny thing happened. Totally unbeknowst to me, the Walt Disney Company announced they were going to built something in – you guessed it – central Florida. Disney World. And that meant lots of soft-drinking tourists. And then on one of his stops, my Uncle said, with a small smile on his face and a twinkle in his eye, how was my stock doing? We went the library. And I walked out of there with eyes as big a saucers. And with a strange new feeling. Rather good but a little scarey.

The price of sleepy little bottling stock was now about $12. For months and months and then years and years it steadily went up. And up. And up still more. It finally (with a split or two along the way, I think) reached the equivalent of $44.

It think it was about 1966 by now. And I went off to college. I would look up the price once in a while, but other matters took precedence. I was a little smarter now, and I began to hear and read things about “Dow 1000” and “recession’ and “bear market.” By the early 1970’s I began to understand how these things could effect my little stock. Its price began to go down. Slowly at first. But then down. And down. And down again. In 1972 it hit – you guessed it - $4 again. I experienced another new feeling – rather bad and quite scarey.

I remember a panicky long distance call to my Uncle. And I still I remember what he said to me:

“You know, Nephew, even though the price of the stock has reversed for now, that does not necessarily mean the company has. The price is merely today’s perception. Reality will out.”

And slowly but surely the price of the stock stopped declining and began to rise again. I slowly began to realize why my Uncle was rich.

Then a few years later something happened to put an ending to this little story. Another letter. This time from the company itself. Saying that they were being acquired. And to please send in my certificate so they could send me in cash for each original share the sum of – you guessed it…

$44.

“Reality will out…”