A US broker model on how to create success, wealth and goodwill.
It takes most professional people several years to achieve success, so why should it take a Thai broker less then that to do the same?
I started out as a retail broker at the Merrill Lynch office in Dallas Texas, in the early 1980"s. It was a solid experience as there were some 45 experienced brokers in this highly successful Texas branch. Mr. Therioux was the Branch Manager and I will never forget him in the charisma and integrity he commanded. One of the experiences I solidly remember was of an older broker (I think in his early 50"s), who had just started out the year before us. He had no previous background in the investment business.
He was the gossip talk around us younger "more formally educated" brokers. We made daily fun of his style because he seemed "gauche" while a bit rough on the edges, yet so energetic! He had an attractive sales assistant so I made sure to sit near him. While I never came close to her, helas like so many others, I did get to see what he this broker did, day-in and day-out.
The year before I came on board he had researched a company he liked at length, visiting them and reading all he could about this firm, one can say he did his own due diligence in dept. The stock he got to admire was "Telephonos de Mexico" (now trading at TMX, I have no current opinion). He adored the high growth rate along with the high dividends and so what, if it was a company just "south of the border".
It was a great story as all of Mexico it seemed was then was being telephone connected.
This company had so called ADR"s so it was trading on one of the main US stock exchanges. He talked about this selection constantly and with much excitement. He knew this firm better then anybody and he insisted that anybody whom did business with him at Merrill at least owned some of their shares. Some clients owned allot, or "a ton" as he would say. Yet all clients had some diversification or at least he made sure that nobody just put all their savings into this one stock. If someone did not want to own any of these shares he would just transfer that customer to another broker.
He refused to day-trade or even sell any of these shares even as it went up in value. only buy, buy, buy. Day after day we heard his sales pitch, TFNO, I think the stock symbol back then was -and his clients accumulated many millions of shares over the 2 years I was there. He did not earn much money as he just advocated buying more, at higher prices, never trading it, never selling any. He drove up to the office with an old diesel fueled Rabitt Volkswagen which nobody wanted to park next to. He was sort of the joke of the office but he knew what he was talking about, at least when it came to TFNO!
After a while the office manager got a bit concerned. I mean, the Dallas office owned more shares of this stock (through this broker) then anybody else, in the entire US! He was still not making any real commissions, and mother Merrill had to pay up to meet his monthly minimum salary, even after 3 years! He always wore the same two neckties and suits, alternatively. He never went for fancy lunches at the many fun places around Campell Center, at Central Expressway. Instead he had a sandwich at his desk and kept calling anybody and everybody with his TFNO stock idea! Day in and day out! He was a voracious phone caller and never hesitant, never running out of gas, never insulted when some hung-up on him.
He told me once "I call at least 150 new people, everyday". He was the master cold caller, but not to sell people anything; no only "to work very hard to enrich them one day", as he called it. This went on and on month after month. This stock declared several stock dividends each year and so his clients position grew larger ever and larger. He never sold any shares, that is unless he got "a letter in writing from my client". And sometimes he did, as at the time there were no fax machines.
After a while we sort of forgot about him as the joke started to wear off because the stock started to rise. He never deviated from this plan. He became the old boring joke and we young starters were looking for some new thing to amuse about. When the stock nearly doubled in value, a year later, we started wondering. Shortly thereafter the joke came back to haunt us.
The rest is history...
The stock then started to brake out above some important resistant lines when it one day soared past 5$ a share, on very heavy volume. He did not sell, instead it motivated him to make even more phone calls and so he kept buying more. Any person whom would listen got his pitch. Once he even opened a new account with a retired person whom bought a whole round lot of 100 shares, for 500 bucks. Another time he sold someone on the idea in a movie theater, during the brake. one night late, when I stopped back at the offices, he was talking about it to the office cleaning crew. He kept very accurate records, on how many people he called and how many ended-up buying his idea, and if not, he send them a nice card.
The stock then soared more, passing 6, 7 and eventually hitting 10$ that spring. Many of his clients more then ten-folded their money as these stock splits had given them ever more shares over this brief period of 2-3 years. Then he took his first holiday in 3 years! He said his wife would divorce him if he did not. He instructed his sales assistant to only accept sell orders for TMX, after making a strong case not to. "My boss does not want you to sell", I heard her say so many times.
The loveliness of this sales assistant was only matched by her loyalty to her boss and talking investors out of selling; even while it would have meant nice commissions and huge capital gains.
When he returned from his short holiday the stock traded around 11$. one day, not long after that, he wrote to all of his clients (as I recall over 2000 of them) that he now advocated for all to open a separate trading account and to move 20 to 30% of their holdings into this new, separate, account. (In his letter he also asked for an update of their investment objective and future financial plans).
He then advocated actively trading these allocated shares in the new trading account. Never mix trading with investing is firmly established doctrine which he adhered to from day one.
So now he was buying low and then selling high, daily, if all possible. The phone was ringing off the hook. Within one month he got some 600 active trading accounts going. And so with due credibility and fairness he made huge trading profits for his clients, besides large commission checks for himself. Now Merrill, Dallas was awash in trading commissions and clients were sending flowers to his office, daily. A few months later he became the most successful broker of that region with earnings around 1 million US$, just in that year. (In those days that was real money!)
His phone rang off the hook now, his sales assistant got help with two others and the stock zigzagged higher, even while I left the firm to become a VP for a Private Swiss Bank. But that is another story.
He told me once in the toilet that "it takes very successful people years to make big money, so why should it take me less then 3 years to do the same?" He is an example of a highly successful retail broker whose experience should/could be a lesson for Thai broker marketing officers here. Whom should look upon themselves as wealth creators, not day traders or research relaters.
Yes, the stock could of also fallen down, but heck the largest phone company in emerging Mexico was not going to go under and yes it was rated a "long term buy", all along, by his employer Merrill Lynch.
I think he ended up retiring, yes, in Mexico with a phone.
Best Regards,
Paul A. Renaud.
PS. While one may tempt think this story was just a "lucky one’since this stock ended-up soaring several fold. I would beg to differ. Over the past years as I has been shown here, there have been many, many examples of various Thai stocks soaring in value -just the same. The problem is the pervasive day traders, which trade out and chase the next short term trade, never so reaching the status this broker attained.
