Friday, February 12, 2010

My Life With Comic Books: Part # 52


In October of 1987 I was “investing” in index options. Gary Cohen, of Merrill Lynch, assured me that he would personally monitor my account so that I wouldn’t lose any more than $2500.00 on any option position. If he saw that one of my options had lost $2500.00 he’d sell it to prevent further loss. He was the senior broker in a major national firm so we trusted him.

Early one morning in October of 1987, Gary Cohen called me to explain that the stock market opened substantially lower. In fact, the market was now so low that I had already “lost” $4500.00 on my index option. He couldn’t have gotten me out of this with only a $2500.00 loss because by the time the stock market had opened, I had already lost more than that. He assured me that it was just a momentary drop in the market and he was confident that the stock market would rebound in a few hours. I asked him to keep me informed of the situation. Gary called me about an hour later and explained that the market was still dropping. He thought it was just nervous sellers. I had now lost almost $17,000.00. By noon he told me that I had lost almost $30,000.00.

I decided to drive to his office to formulate a new plan. By the time I arrived I had lost $49,000.00. I was expecting to see his office full of depressed brokers but I was stunned by what I saw. Many of the brokers were joking and laughing! I overheard Gary calling a client and saying, “Hey, do you have your seat belt on? Well, you’re going on a wild ride!” When he got off of the telephone I saw him laughing. The brokerage was going to make a fortune in commissions for selling the stocks and options while their customers lost a fortune and the brokers were laughing.

I called my wife to tell her about this huge loss. She asked if this was going to “change” our lifestyle in any way and I told her I’d do my best to see that this loss wouldn’t adversely affect us. She knew there was nothing I could have done to prevent this loss, (other than not invest in the stock market at all) and she was quite understanding.

In the early afternoon the stock market had a little up-turn and I was able to sell my option and “only” lose $34,000.00. At that point I was just happy to be finished with this nightmare. I would try to avoid investing in things that I have no control over. Manipulators and brokerage firms control the stock market with only their own interests at heart.

My father and my Uncle Jim also lost a lot of money in these index options. We all learned a valuable lesson and we were all able to laugh about our losses a few months later. This doesn’t mean that we were happy about the lost money but the three of us now realized that we shouldn’t have been risking our hard-earned money in such a phony manipulated market. Although this experience wasn’t as much fun, we now had another “gambling” experience in common. I’ll tell you about my previous gambling story with my Uncle Jim in the next chapter. It was much more fun!

I was now going to concentrate on my main business to earn my money. My business is selling comic books and collectables.

Next Chapter: Gambling with The Mob in Las Vegas.

1 comment:

  1. I once lost $25 at the casino.


    Yeah, okay, your story is better.