Vita Sua in a Bygone Mobile
Part 10 in a series: The doctor operates in the market and I'm happy to assist.
Previous installments: 1, 2 , 3 , 4, 5, 6, 7, 8 and 9.
Mobile Bay Times
While I was thus engaged in the late fifties, I continued to make steady, if unspectacular, progress in my vocation. Record production in 1959 was followed by slightly less production in 1960.
It was in 1962 that I established an all-time record for a single year's production for anyone in the Mobile office of SRC. Dr. D returned to the commodity market with a bang and the stock market enjoyed one of its finest years, surging from a 610
low to a 735 high,
which it hit in
and which was
followed by a
vicious bear market
-- just six months,
but amounting to
27 percent in the
But 1961 was a
great year. My
soared, as did my
Dr. D. traded as many as 400,000 bushels of soybeans on one day. Commissions on this size trade amount to $1,200.
When the doctor re-entered the market, he told me, "Mr. A, I am going to buy soybeans. However, when I reach a position of 500,000 bushels, I want you to say to me, 'Doctor, you have reached your limit. You cannot buy any more.' Will you do that for me?"
It was not long before the doctor reached his limit. I reminded him of my obligation to cut him off at that point. The doctor was silent for a moment.
"Just this once, Mr. A, let me take on more."
I wasn't about to stop him. It was a game we played. He was semi-serious. He knew that he had a compulsion to build up a pyramid that would eventually collapse on him. But, when the time came when caution indicated that construction of that pyramid should be halted, at least for a time, he just couldn't resist continuing to build.
The procedure resulted in great increases in my commissions. He would perhaps have a position of 600,000 bushels of beans, they would go against him and he would face a huge margin call. Rather than give up the position, he would "hedge," that is sell a different month of beans against the position, thus decreasing his potential loss and eliminating the necessity for a margin call. When the beans began to rise in price again, he would "lift" his hedge, hoping for continued strength that day so that he would not have a call. If enough strength didn't develop, he'd hedge as many contracts as needed at the close of the market session to avoid a margin call.
This made for some rather lively and profitable business for me.
In this sort of operation and with the wild market, it became imperative for me to be able to reach the doctor at all times between the 9:30 a.m. opening the 1:15 p.m. closing of the Chicago Board of Trade grains market.
This included those days when the doctor was operating on the eyes of his patients.
How would you like to have been one of those patients, under the knife
and with your
sight hanging in
the balance on a
day like this?
It is 1:10 p.m. I
reach the doctor
in the operating
room. The beans
against him. I
figures all over
a pad of paper
and have come
up with the total
contracts he must "hedge" as best I can figure the probable closing price.
I have an order blank filled out so that I can move immediately after talking to the doctor.
I tell him the situation. He mentions the possibility of perhaps a little more strength in the closing minutes so that he may not have to sell quite as many contracts. The
precious seconds, meanwhile, are ticking off the clock.
He says, "Excuse me, a minute, Mr. A."
I can clearly hear him turn to this assistant and give him some instructions in technical terms that, for all I know, may mean 'remove the eyeball.'
He returns to me. It is now 1:13 p.m. He sighs deeply. "Mr. A, sell 200,000 bushels of beans at the market."
I should tell you that 200,000 bushels of soybeans were then worth about $700,000!
I would hardly care for the experience of having an eye operated on by anyone. But I must say that I would have felt safer with Dr. D., even under those circumstances, than I would have felt with anyone else.
He was, as the kids of those days were wont to say, 'one cool cat.' The coolest cat I have ever known.
Ironically, the doctor was to die on the day that soybeans hit an all-time record price.
His lifetime record as a commodity trader, I am sure, showed a loss.
However, I think this bothered him not at all. It really wasn't the money he loved. It was playing the game.
Dr. D. seldom came to the office. One late afternoon he did. We talked a while, then he said, "Mr. A, I would like a Coke. Do you have a machine here?"
"Sure, Doctor, let me get you one."
I started for the rear door and the adjacent automobile hotel where a machine was located.
"Just a minute, Mr. A. I will pay for it."
"No, doctor, I'll get it. I want one, too."
"No, Mr. A, here's a dime for my Coke."
He would not let me pay for his Coke. And he would not buy me one.
He was truly from the old school. Ours was a business relationship and even the price of a Coke, in his mind, might be construed as buying a favor.
(Chapter XI: Nobody rings a bell and says, "This is the top of the market. Get out.")