One of those “Wolf of Wall Street”-type guys phoned me a few days ago.
It was early evening, and the screen on my receiver showed a 212 area code.
I don’t know anyone in New York City, and rarely get unsolicited calls. But curiosity took over, and like a hungry bass, I took the bait.
“Hello, it’s a great day at Solid Tree High End Investments. Is Steve Hansen available?” the middle-aged male voice enquired.
“This is he,” I answered, wondering how he got my unlisted phone number.
“This is Robert Avon. I’m the brother of Charles Avon. I’m sure you’ve heard of him. He’s one of the best Wall Street analysts in the business. He asked me to call you.”
“He did?” I said with some confusion.
“Yes. I understand you contacted his website, and we would both like you to become part of our investment family.”
“Dumb me,” I thought. “That’s what I get for surfing the Internet!”
After Robert tried to make small talk about the weather and general pleasantries, I interrupted and asked him to “get to the point.”
“OK,” he said. “You must know that Charles Avon is one of the best at what he does. Because you’ve had many years as an investor, he has selected you to become one of our highly prestigious clients. As his brother, I will guide you personally through our buy and sell recommendations. I know you won’t want to miss this once-in-a-lifetime opportunity.”
As a note to the reader, Avon’s game is playing the “high flyers.” These are small companies — usually technology — that rapidly grow their stock values but plateau quickly and often are sold off with the same pace. They can be pushed by pundits. However, the players who made the real gains often have pulled the trigger before the TV and telephone sideshows for the “little guy” begin.
“His brother?” I thought. “That’s weird. Charles has a British accent and this guy sounds like he grew up in Brooklyn.”
“Thanks, but no thanks,” I responded.
“What?” he answered. “I can’t believe what I just heard! Do you know how many people we turn away each day who want the services of Solid Tree — especially to be in my highly selected circle of accounts? The vast majority of people simply don’t have the investment experience to qualify.
“May I ask why you’re not interested?” the boiler room barker inquired.
“Sure,” I said. “I’ve tried some of your ‘brother’s’ recommendations and haven’t been too thrilled with the outcomes.”
It’s true that some can make quick profits investing in these types of stocks, but the downside risks are high. I don’t think it’s much better than a trip to a Vegas.
“I’ll stick with the large caps,” I told Robert. “Thanks for the call.”
He hung up quickly — without saying “goodbye” or even “have a nice day.”
Apparently, he hadn’t learned from the “Wolf of Wall Street” movie that a broker should never hang up until a “yes” is heard on the other end of the line.
That call made me think about my personal take on the market. Over the years, I’ve used many strategies at the Wall Street casino. But what has worked best for me is buying large caps with growth potential. I look for low price/earnings ratios. I use only tried and true brokerage houses, and I’m patient for the results.
Of course, I try to keep in mind the most important rule of all: Buy low, and sell high. It’s amazing how many people (including myself at times) have a problem with this relatively simple concept.
But fortunately for me, one “fish” managed to slip the hook of the boiler room brokers the other night and live to swim with the sharks another day.
Steve Hansen is a Lodi writer. Business and brokers’ names used in this column are fictitious.