Friday, April 17, 1998

Cash-King Portfolio Report
Al Levit

Glendale, CA (Apr. 17, 1998) -- Today is Friday, which means it's time for a Foolish financial lesson in the Cash-King folder. Today's lesson is about junk. You know, the sort of junk e-mail you get in your box. Or unsolicited mailings sent to your home.

About a year ago, a wonderful post showed up in Fooldom from a woman in Alabama. She wrote that for the past few years, each day she'd been taking all of the junk mail sent to her home, stuffing it into one of the pre-stamped envelopes from one of the mailers, and sending back a football-sized package of junk to them for free.

Try it. It's empowering... in a small but quite Foolish way.

Thankfully, today's report is also a tale of joy, not woe, about junk communication. It's about how a Cash-King investor, in this case me, motivated a cold-calling stock broker (CCSB) to hang up on him. That's right, the broker hung up on me! Not only that, but I did it while following these Foolish ground rules:

  1. I was very polite.

  2. I answered the broker's questions truthfully.

And this is a true story. More or less. Only the names and some of the details have been changed. The changes have been made to protect the innocent, assuming there are any, and because I can't perfectly remember all the facts.

It was a stormy evening, somewhere back in January. I was grilling salmon, boiling rice, and steaming asparagus for a group of friends arriving for dinner in an hour. I had my radio on in the kitchen and was listening to a market-timing gooroo being interviewed on a financial show:

"Blah blah blah currency debacle blah blah blah historically high multiple blah blah blah can't go any higher blah blah blah Dow 6800 by the summer blah blah blah...blah blah blah...blah blah blah..."

Brrring! The phone rang.

Al: Hello, Al Levit speaking.

CCSB: Hi, Al. I'm Frank Lawson from HJ Brokers, Inc. with a pretty interesting money-making idea for you if you have a second. [No pause for a reply.] I want to tell you straight off that I'm not actually going to sell you anything today. I just want to send you some information.

Al: Thank you. But no, I'm not interested.

CCSB: One second of your time, Al. Tell me do you ever invest in stocks?

Al: I'm sorry, I said I'm really not interested.

CCSB: Come on, Al, you can tell me. Do you ever invest in stocks?

Al: Okay. Yes, I do.

CCSB: Great. What kind of stocks have you bought in the last year?

Al: Well, I bought Microsoft three times, I bought Cisco three times, I bought Dell three times, and I bought Coca-Cola once.

[Scribbling sounds from the other end of the line.]

CCSB: Oh, it sounds like you like to flip tech, Al. Buy 'em, sell 'em later. Buy 'em again, sell 'em another time. That kind of thing.

Al: No, I'm afraid you don't understand. I didn't say anything about selling these stocks. I just bought more and more. I've still got full positions in all of them.

CCSB: Well, let me [wheeze] tell you about what we at HJ Brokers can do for you. I want to send you some information about how we identify turnaround candidates and generate a 30% to 70% return for our clients in six months.

[And the SEC is concerned about the Internet?]

Al: Good luck to your clients. That soundsgreat for them. But I'm really not interested.

CCSB: Al, all I'm going to do is send you some info. It'll show you our wonderful performance record. And look, I've already got your address right here.

[He reads my address aloud. Yep, he sure does have my address.]

Al: Please don't waste your money. I'm not going to read it.

CCSB: Well Al, at least tell me this. When was the last time you bought stock from a guy like me who called you on the phone?

Al: I've never bought stock through a human broker.

CCSB: Give me a break, Al, a guy who buys stock the way you do, I know you've bought from guys like me before.

Al: No, CCSB, I've never bought stock through a human broker. I used to make my purchases via an automated broker on the telephone. Now I make all of my trades electronically, online.

CCSB: You've never taken guidance from a guy like me?

Al: Nope.

CCSB: Never?

Al: No. Never. And I think that's one of the reasons I've been beating the market in the '90s. Yee-haw!

CCSB: Oh. Well. Good luck.


I believe I heard angels hitting a few chords after that click sound. Since then, I haven't received a single call from a transaction pusher, err, financial consultant. It does sound like he may have gathered some marketing material from me via those questions... but it also looks like the end result could be no more financial phone junk for me.

So, just in case they call you, I suggest you memorize this key dialogue:

You: I never buy stocks through a human broker.

CCSB: Never?

You: Nope. Never.

If you do have a broker, and a good one that beats the market for you after the costs of investing have been subtracted, well... then perhaps you should say so and leave it at that.

Finally, if you have any ideas for ways to drive junk communication out of our lives, please drop your suggestions in the Cash-King Message folder.

I'll be back in three weeks. Rob Landley (Oak) takes over on Monday. 'Til then...

Fool on!



Stock  Change    Bid 
 CHV   -  3/8   83.38 
 KO    +2 3/16  77.00 
 EK    -1 1/16  70.63 
 XON   +1 1/4   72.13 
 GM    -1 3/16  68.94 
 INTC  +  7/8   75.19 
 MSFT  +  7/16  92.13 
 PFE   +4 9/16  105.19 
 TROW  +2 1/8   75.38 
                  Day   Month    Year  History 
         C-K      +1.07%   2.52%   6.56%   6.56% 
         S&P:     +1.31%   1.90%  12.13%  12.13% 
         NASDAQ:  +0.45%   1.68%  12.93%  12.93% 
     Rec'd    #  Security     In At       Now    Change 
    2/3/98    22 Pfizer        82.30    105.19    27.81% 
    2/3/98    24 Microsoft     78.27     92.13    17.70% 
    3/12/98   20 Exxon         64.34     72.13    12.11% 
    2/6/98    28 T. Rowe Pr    67.35     75.38    11.92% 
    3/12/98   20 Eastman Ko    63.15     70.63    11.84% 
    2/27/98   27 Coca-Cola     69.11     77.00    11.42% 
    3/12/98   15 Chevron       83.34     83.38     0.04% 
    3/12/98   17 General Mo    72.41     68.94    -4.79% 
    2/13/98   22 Intel         84.67     75.19   -11.20% 
     Rec'd    #  Security     In At     Value    Change 
    2/3/98    22 Pfizer      1810.58   2314.13   $503.55 
    2/3/98    24 Microsoft   1878.45   2211.00   $332.55 
    2/6/98    28 T. Rowe Pr  1885.70   2110.50   $224.80 
    2/27/98   27 Coca-Cola   1865.89   2079.00   $213.11 
    3/12/98   20 Exxon       1286.70   1442.50   $155.80 
    3/12/98   20 Eastman Ko  1262.95   1412.50   $149.55 
    3/12/98   15 Chevron     1250.14   1250.63     $0.48 
    3/12/98   17 General Mo  1230.89   1171.94   -$58.95 
    2/13/98   22 Intel       1862.83   1654.13  -$208.71 
                               CASH   $5666.26 
                              TOTAL  $21312.57 
 *The year for the S&P and Nasdaq will be as of 02/03/98