| The Bridge 9 |
| 1 | NINE I was drowning in money. People around the world were reading the book, buying copies of other books I had written. Money from every book-sale came from the publisher back to me. Airplanes I can handle, I thought, but money it makes me nervous. Can money crash? Palm fronds waved outside his office window, sunlight warmed the reports on his desk. "I can handle this for you, Richard. There's no problem here. |
| 2 | I can do it if you want me to." He stood an inch over five feet tall; his hair and beard had turned from red to white over the years, changing a gifted elf to an all-knowing Santa. He was a friend from my magazine-writing days, editor turned investment counselor. I had liked him from the first story-assignment he had given me, admired his calm sense of business from the first day we had met. I trusted him completely, and nothing he had said all afternoon had flickered that trust. |
| 3 | "Stan, I can't tell you how glad ..." I said. "It's got to be done right, but I don't know what to do with money; and paperwork and tax-things, I don't know about it, I don't like it. Effective now, Financial Manager, it's your business, full-time, and I'm out of it." "You don't even want to know about it, Richard?" I looked again at the graphs of his investing performance. All the lines went straight up. |
| 4 | "Nope," I said. "Well, I want to know if I ask, or if there's any huge decision you're about to make. But so much of what you're doing is so far over my head ..." "I wish you wouldn't say that," he said. "It's not magic, it's simple technical analysis of commodity markets. Most people fail in commodities because they don't have the capital to cover a margin call when the market moves against them. |
| 5 | You-that is, we-don't have that problem. We start investing cautiously, with a large capital reserve. As we earn money with our strategies, we then become more speculative. "When we walk into something as obvious as a head-and-shoulders in a commodity, we can move a lot of money and make a fortune. And we don't always go long, a lot of people forget that. There's just as much money to be made short." He smiled, noticed I was lost already. |
| 6 | He touched a graph. "Now you take this chart, which is plywood prices on the Chicago Board of Trade. You see right here's the head-and-shoulders starting, the warning that the bottom is about to fall out, this is last April. At that point we would have sold plywood, sold lots of plywood. Then when the price tumbles way down here, we would have bought lots. Sell high and buy low is the same as buy low and sell high. |
| 7 | See that?" How could we sell . . . "How can we sell before we've bought? Don't we have to buy before we sell?" "No." He was as calm as a college dean, explaining. "These are commodities futures. We promise to sell later at this price, knowing that before the future comes, when we have to do the selling, we will have bought plywood-or sugar, or copper, or corn-at a much lower price." "Oh." "Then we reinvest. |
| 8 | And diversify. Off-shore investments. An off-shore corporation might be a good idea, as a matter of fact. But CBT will be the place to start, maybe a seat on the West Coast Commodity Exchange. We'll see. Buy a seat on the Exchange, your broker fees go to nothing. Later, diversification; controlling interest in a little company on its way up could be wise. I'll be doing research. But with the amount of money we have to work with, and a conservative strategy for the markets, it'll be pretty hard to go wrong." I came away convinced. |
| 9 | What a relief! In no way can my financial future get tangled, parachute-like. I'd never be able to handle money the way Stan did. Not patient enough, wise enough, and I don't have charts that shoot moonward. Yet wise enough am I to know my own weakness, to find a trusted old friend, and give him control of my money. |
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