Friday, December 24, 2004


Dad passed away this year. He would have been 84 in October. He left behind his loving wife of 60 years, 5 children, 4 son and daughter-in-laws, 12 grandchildren, 7 grandson and granddaughter-in-laws, and 3 greatgrands. He was preceded in death by his "favorite son-in-law", Russell Blackburn.

This blog is about stocks and bonds and Dad invested in stocks, bonds and real estate. He made his serious money in real estate. His most important investment was the purchase of 22 acres in 1966 near the Clemmons NC interstate 40 exit. The land was a farm on a dirt road and the seller insisted on a small down-payment and 5% interest on the balance over 10 years. Dad said that it is every man's dream to own 10 acres, 10 miles from town, on the interstate. In hind sight, it looks like an easy decision but like all great investments, it typically takes a combination of vision and common sense to make the right choice.

When I was 11, 12 and 13 years old, Dad took me downtown to watch the stock market ticker tape at the old Harris Upham office. There were always old men there watching the tape. They pretended to know who was buying and who was selling the heavy activitiy in a certain stock. Watching the tape was an enjoyable past-time for these old guys. I love to watch the tape to this day.

Dad had a healthy skepticism about the motivations of brokers and brokerage firms and liked to make his own decisions. For years, he used drafting tools to draw chart patterns and then for years he subscribed to Daily Graphs or an Options Chartbook. He never cared a lot about fundamental investing. One of the things he taught me about the market is that it is like steering a battleship. He believe that once a captain gets a battleship headed in a certain direction, it is going to continue to go in a direction for a good distance and there is no reason to get in its way. He said the captain may tack back and forth across the wind but he was not likely to turn around until the trip was made.

When Dad was 79 years old, he purchased a computer, learned how to use it and learned how to trade stocks on-line. He certainly was not afraid to seek out new ideas or to try new things. Reviewing his accounts and making frequent trades at discounted commissions was a past-time that he enjoyed immensely. Ironically, even though I learned a lot from him, I developed a very different investment philosophy and I often disagreed with his investment decisions. He and I had to be careful when discussing investments because it was easy for us to get into an argument.

In truth, in my humble and honest opinion he was not terribly successful in the stock market. He purchased several very good winners during his life and held several excellent stocks for long periods of time, but he also bought a lot of turn-around plays, stocks that looked cheap, only to see them go down more. He was far more likely to average-down than to average-up. He enjoyed trading options and really did not want to hear my opinion that no one is likely to make consistently good returns trading options. Just like he would have done, I let him know my opinion anyway.

As a patriotic American, he purchased savings bonds for his grandchildren. Once again, I made the mistake of telling him that there are better investments available. He thought I was half crazy when I went on margin to buy treasury bonds when yields were high. It didn't matter that I made money. He believed that one should avoid borrowing money if at all possible. He saw bonds as savings instruments for children and old people. He never got old and he kept his investments in stocks and real estate.

I suppose the most important investment trait he and I needed to improve upon was patience. I have become a more patient investor over the years but he and I were always restless and excitable. Like so many others, we always liked to make a quick dollar and move on to the next trade. The good news is that my children own stocks that they have held for several years and that have done very well. They have learned that it is time in the good investment rather than timing the good investment that makes the serious bucks. The other good news is that Dad made a lot more money than most during his life time, left his wife and children with solid real estate holdings and enjoyed the past time of trading stocks.

Tom Brokaw wrote about the greatest generation and Dad could have been his perfect example. You have all heard the many stories about depression era tough times. Dad was literally one of those who earned 10 cents per day working long hours in the tobacco fields. Before long, Dad was making 2 cents more per day than the other workers because he was willing to take care of the mules and to turn the sleds around at the end of the rows while the other workers caught a quick break.

Dad had nine brothers and sisters who never went hungry. When a neighbor visited, there was always an extra glass of lemonade because Dad's Mom, Beatrice Reavis Miller, could squeeze just a little bit more juice out of the lemon.

Dad was a world traveler who visited every state in the US and at least 50 other countries. He graduated high school in 1937 and immediately left the family farm to join the navy. In six years of service, he was promoted through the enlisted ranks to Chief Warrant Officer. He was one of those un-sung heroes that saw more war than anyone wanted to see. When pushed to talk about the war, he could tell incredible stories but he really did not like to bring up the memories. When it was done it was over and he came back home to raise a family with his childhood sweetheart, Mary Lou Reavis.

Dad valued the education he received during his Navy years but he was a farmer at heart. He and Mom used six years of savings as down-payment on a farm and proceeded to do what farmers do; grow crops and kids. When it became obvious that a small post-war farm would not support a family of seven, Dad helped Mom farm during the day and took a night job with the Western Electric division of AT&T.

Mom taught school, farmed and looked after the kids while Dad worked his way-up through the ranks at Western Electric. Mom and Dad sacrificed, saved, invested, gave to the church and the needy, sold the farm, moved to town and enjoyed seeing all five kids graduate from college. The fact that they sold the farm does not mean that they quit their second jobs. While Mom was likely to can vegetables to save a few dollars, Dad was always working to make a few extra. He sold everything from cookware to burial plots. He and Mom always raised a garden if not milk cows, beef cows or even a big old hog. They built workshops on the 22 acres, and rented them out to various small businesses. When it was time to paint or repair, they were there.

Dad retired from Western Electric at 56 years of age to travel, but he continued to work very hard as he had always done. In retirement, he was everything from a waiter in the New Orleans French Quarter to a vendor on the boardwalk at Myrtle Beach. A few months before his death, my brother and I could do nothing but laugh when we found him sawing down a tree one afternoon after he had gone for cancer treatments in the morning. My brothers nor I were ever able to out-work him.

O.K. now that you know a little about Dad it is time to explain the title. As you have read, Dad was a busy man. The casual observer might think that he did not have the time to show a lot of love. He could be so focused on a task that his family knew better than to bother him. He could snort, fuss and yell with the best and his words could even bite. At the age of 13, I could tell if the stock market had gone up or down when I heard his footsteps coming though our back door. Dad went all out, heart, mind and soul, to succeed. When things did not go particularly well, a foul mood could come over him. His solution was to simply work it off.

My brothers, sisters and I lived in a nice house, wore good clothes and rode in nice cars but sometimes we felt a little poor because we did not have money to waste. The neighborhood kids bought sodas, candy or marbles but we had homemade butter, blackberry jelly and fresh milk for snacks (we didn't have the sense to know that there is nothing better than homemade butter, blackberry jelly and fresh milk). We learned to win the other kids marbles in a fair contest and then sell them back to them cheaper than the store price.

Mom and Dad looked after us but they also expected us to look after ourselves. It was no big deal for me to walk to and from scouts or to walk home after basketball or football practice. My older sister helped run the house at young age and each child got a turn or two spending the summer with Grandma and Grandpa so we could work in the tobacco fields.

The casual observer would have been mistaken. Dad did take the time to express his love, he just did it differently. Keeping the promises he made was an act of love. The high value he put on education caused him to promise all 5 kids that he would pay for their education no matter how long they went to school. He threw in the stipulation that his payments ended when each child married. Another promise he made was that he would have a car sitting in the driveway on a Friday or Saturday night for us to use when we got old enough to drive.

Dad did not go back on a promise! By the time I turned 16, both my brother and sister had used our six year old Volkswagen as their car. By this time, my brother was working at Burger King after school and had purchased a new GTO. The Volkswagen wasn't much but it was all I expected. I drove it to school, to work, to after school events and on dates. That is until three friends and I rolled it over on the way to a football game.

We bent the fenders out, tied down the hood and managed to sputter all the way home. We had scrapes and bruises but none of us would go to the hospital even after Dad tried to convince each parent that a check up would be wise.

Dad knew I needed a car to take my brother and sister to school and to get to work so he continued to provide one. He bought another wrecked Volkswagen, cut the two of them in half and used epoxy to glue the two halves together. He personally rebuilt the motor and painted the body drab army green with a paint brush. It was not a pretty sight. I drove that car for the next several months.

At the time, I was probably embarrassed, just a little, to drive a beat up, hand panted, drab army green Volkswagen to school but I don't remember being embarrassed. At the ripe old age of 16, I was naive about a lot of things but I understood the lesson of the prodigal son. I went out and squandered my first car but my loving father spent his time and money rebuilding that old car for me.

Dad never ceased to amaze me. When the Volkswagen died again, he sold the frame, to a guy who wanted to build a dune buggy. He got enough money to buy the 1962 Ford Falcon that I drove for the next year and my sister drove for two years afterward. When my older brother was drafted, he left his 389 cubic inch, four in the floor, GTO at home. Dad and my brother trusted me to drive it! In a year, I had gone from the worst car as school to the best and life was good.

A short time later, my older sister married after her second year of college. Dad stuck by his promise. He wanted his children to be educated more than anything but he made a promise and he kept his promise. My sister's husband worked to pay for her education and then she worked to pay for his.

Without telling several more family stories, suffice it to say that Dad did not pay for all of any of his children's educations. We all married before we graduated and he kept his promise to us all; he paid until we were married but nothing afterwards. He taught us well, we all value education and we all have at least a four year college degree. His grandchildren have routinely finished undergraduate schools and several have or are working on graduate, MBA or Law degrees.

We all know in our hearts that God is Love. God gave us rules and freedom. We are free to do what is right or what is wrong. Dad understood and lived these concepts as well as anyone. He upheld his commitments to others, made rules for his children and he hoped and prayed that his children would live life well. On this Christmas Eve, I am thankful for "The Love of Dad". Mom is living alone after 60 years of marriage. I hope you will keep her in your thoughts and prayers.

I thank you all for reading this. I wish you all the best of Holidays, a Merry Christmas and a Happy New Year.


Jack's Old Merrill Pal said...

Doctor.. my condolences to you and your family. My dad died of cancer in '97 and I hear parallels in the stories.

My dad would do anything for our education. At one time he had four children in college and never complained about the money ( except the time I paid $35 to see the Duran/Leonard fight,,,,NO Mas! ) Somehow I'll never forget that one and it invokes guilt to this day.

One short investing story...he never cared for money. He grew up poor and really never believed a person should singularly pursue wealth (eg "the money man" )

He and his brother bought some old land near the coast for $5 and $10 an acre in the early sixties. They had about 250 acres. My mother complained about this land and what a waste it was. Yes he sold it and invested it with a broker as any proper and sophisticated investor would do. This was about 1971. I do not recall the names of the stocks but I know the current math. He lost all the value of those stocks. The land was subsequently developed in the latter 70's and that type of land now sells for about $40,000 to 50,000 an acre.

He never complained. He'd laugh about it.

Oft times I believe those old guys knew alot more than we give them credit for especially when it comes to patience in investing. Buying land in the right spot and waiting works.

Mike Taylor said...

Jack, very sorry for your loss. My thoughts and prayers are with you and your family.

Your dad sounds like one of a kind. I really enjoyed reading this story. I'm going to pass it on to my dad to read. He grew up in the depression and I'm sure this story will bring back many memories.

We lost my mom to cancer on December 25, 2001. She too was one of a kind.

Thanks again for sharing your dad's story.

Best Regards,

Michael Taylor