Stuck Inside of LA with a Hot Stock and No Broker

Back in the sixties, when I was young and stupid, I started walking down to the Merrill Lynch office, every day, on my lunch breaks. I was fascinated by the idea of trading stocks. It seemed a way of getting money without working for it.

I stood in the back of a room with a bunch of old men, watching the electronic tape going by. Over in a corner, there was a complete set of Value Line reports in a big black loose-leaf binder. Most of the pages were unintelligible to me, filled as they were with what looked like columns of hieroglyphs. Each page was dedicated to a single stock and, at the bottom of the page, there was a little report that discussed the stock's chances, going forward. After studying the pages for some time at the Merrill Lynch office, I sent $245 to Value Line for my own subscription. Then I was able to read the pages as much as I wanted to, in the comfort of my own home.

Eventually, I started thinking about buying something. One stock, in particular, struck my fancy - National Homes. Value Line classified it as a Special Situation and rated it as one of their top picks. That was all I needed to know.

I started watching it every day. I noticed that it never traded less than 5 or more than 5 7/8. I watched it for six months. Then, one day, it went by at 6. I had never seen it do that before. So I bought 100 shares at 6. Then, it started trading between 6 and 7.

Right at that time, the first week of June, 1968, I had to go to Los Angeles on business. I was devastated because I wouldn't be able to watch my stock trade during the day, so in LA, every day after work, I got the early edition of the paper, which had the closing New York stock prices in it. By midweek, my National Homes stock had gone up to 8 1/2. I was thrilled.

But in the same paper, that night, there was a headline, saying that mortgage rates were being increased. I didn't know what that meant, exactly, but it didn't sound good for any company with "Homes" in its name. I decided that I needed to sell my 100 shares, quick, before they went down.

The problem was, my 100 shares were back in Atlanta, on account with the Merrill Lynch office there. I had to do something fast, because in LA the stock market opened at 6 AM and I had to be at work at nine. I made a desperate plan.

The next morning, I got up at 4 AM, dressed and shaved, and took a taxi to the local Merrill Lynch office, arriving just after five. Of course, they didn't know me there, but I explained that I had 100 shares of stock sitting in their Atlanta office that I wanted to sell at the open. Without benefit of computers, they called Atlanta with my ID and confirmed that I was legit. They put the order in.

I went to work, wondering all morning what price I had gotten. At lunchtime, I called the Merrill guy and he said I got 8 1/2. I was ecstatic. I asked him where it was trading, right then. He said, "9." I asked him to check it again. I explained that the mortgage rates were going up and that was going to make housing stocks go down. He said, "It's still 9." By the end of the week, when I flew home, it was 11.

I was crushed. I got a measly 41% profit, when it could have been 80%! I should have stood in bed. Literally. I thought about buying back in at 11, but I couldn't bring myself to do it.

Within two months, it reached 54. I was inconsolable. I stopped checking the price after that.

A year later, I decided to check it again. It was back to 6.