I am many things. A financial genius is not one of them. And, like so many of my other shortcomings, I blame my parents.
I was blessed with loving parents who gave me much – a warm home, endless support, a love of Judaism and Israel, an appreciation of the arts, season tickets to the Denver Broncos – but they didn’t give me financial smarts.
No, not at all. Nada.
Some kids I grew up with – especially one good friend named Scott – lived and breathed high finance, or at least commercial real estate.
These were friends whose fathers were titans of industry, not high-school English literature teachers.
Their dinnertime conversations were peppered with discussions about adjustable rate mortgages and subordinate financing; mine was about the poetry of Edna St. Vincent Millay and whether Shakespeare really was an anti- Semite.
And those kinds of conversations during the impressionable years leave an impact, set you off in a certain direction.
Be careful what you talk about with your kids around the dinner table. Scott is now a real-estate mogul in Chicago. Me, I write for a living, struggling to tap my inner St. Vincent Millay, and still wondering whether Shakespeare really was an anti-Semite.
You are what you eat, the old saying goes. Not exactly. Perhaps more accurate: You are what you discussed when you ate with your folks.
Scott took his bar mitzva money, invested in stocks, bonds and commodities, and today is worth millions. I pocketed a few $25 Israel Bonds that grew to $40 after 25 years, and put the rest of the money I received into a savings account in the bank. For weeks I tried unsuccessfully to figure out how much I would earn annually on .02% interest compounded daily.
SO IT was with more than just a little trepidation that the Wife and I decided, upon coming into a small inheritance, to invest in stocks. The money itself had been invested in some shares, but the agent responsible for the portfolio said that the amount was too small for him to continue dealing with it, and that we had to withdraw it. So we decided to re-invest in the market ourselves.
The idea sounded real cool, very grown-up. Even manly.
There are certain things that I have always romanticized about doing when I got older, manly things, things I saw Humphrey Bogart do in the movies, or imagined he might do in real life, but – because of my constitution – I just wasn’t built for. Drinking is one of them, stock buying was another.
I’m not a drinker, never have been. For some folks, booze makes them feel good. It makes me feel tired. As a result, I don’t drink. Who wants to feel tired? If I wanted to feel tired I’d go to bed later and get up earlier.
Which puts me at a disadvantage when I find myself in social situations where people are trying to ply me with drinks. Red wine. White wine. Scotch. Whiskey.
There is a whole culture surrounding the wine and whiskey thing. People can talk about it for hours.
With wine it’s the bouquet and the body and the finish (all dry wine tastes the same to me, desperately lacking sugar).
And with whiskey it’s long discussions about single- malt or blended, bourbon or scotch, and the different colors (and prices) of Johnny Walker labels.
All that talk leaves me cold (and bored). When asked whether I want a shot, I generally reply, “No, but do you have some warm milk?”
STOCKS, TOO, always seemed to me to be something over my head, for other folks, perhaps the wealthier ones. I didn’t grow up in a home where stocks were part of my milieu, and – as a result – I didn’t imbibe any real stock wisdom.
In fact, well into my fifth decade, I had never – but never – independently bought or sold a single share of stock. Sure, I’m indirectly invested in the market through various pension plans, but up until two months ago I never gave a buy or sell order in my life.
Part of the reason was that I didn’t know how. Did I need a broker? An agent? Could I even get a broker to waste his time on someone with so little capital to invest? But now it’s different. Now you go on the Internet and within an hour you’re trading with the big boys. And it’s definitely opened my eyes and widened my horizons.
I understand and relate to certain things now that never used to make sense to me. No longer is the British stock index FTSE, pronounced “footsie” on Israel Radio, something done under the table.
No longer is the German stock index DAX, pronounced “docks,” a place where you park boats. And no longer is the Hong Kong exchange, known by those in the know as the Hang Seng, something that conjures up in my mind surfers with a lisp. No, these are now real to me, world indexes I suddenly feel the urge to follow on a daily basis.
Boom. All of a sudden I’m becoming George Soros.
WITH IMPECCABLE timing, I chose to buy my first-ever stock at the end of November.
At the time I didn’t know a bull market from a bear, being in the red from being in the black. But I learned fast.
The bull market is the one I missed by about a week, the one where prices soar. The bear is the one I entered, the one where prices drop precipitously.
Black is when you’re earning money, red is when you lose. Actually, on my computer screen green is where you earn. I haven’t seen that much green. In fact, a month after I entered the market, Wall Street had its worst start to a year since, well, ever.
Before the Wife and I decided to buy some stocks, we earnestly discussed in serious tones – sounding like veteran financial advisers ourselves – our investment goals. Neither gamblers nor those looking for a get-rich-quick scheme, we were of the same mind: we were in for the long term. We’d buy the stocks and keep them from five to seven years. That way the daily fluctuations wouldn’t matter that much.
That way we could ignore those daily fluctuations.
Except, of course, you can’t.
Because with the Internet you’re not just checking the stock prices once a week in the paper, like you did when you were assigned a stock to follow and chart in an eighth grade social studies class.
No, now you’re checking every day; every hour; heck, about five times an hour.
And when you check so often, all those pre-investment rationalizations that stocks are not gambling – that the market is not just some massive roulette wheel, but rather a logical force that can be understood by reading all the analysts – goes up in smoke as prices rise and fall hourly, seemingly without any logic.
The bad news is that this can all be very nerve-racking.
The good news – at least from the perspective of feeling more manly, of being more Humphrey Bogart- like – is that it has forced me to re-think that whole wine and whiskey thing.
A collection of the writer’s ‘Out There’ columns, ‘French Fries in Pita,’ is available at www.herbkeinon.com and www.amazon.com