Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Posting-Version: version B 2.10.3 alpha 4/15/85; site sdchema.sdchema.UUCP
Path: utzoo!watmath!clyde!burl!ulysses!mhuxr!mhuxt!houxm!vax135!cornell!uw-beaver!tektronix!zehntel!dual!vecpyr!amd!pesnta!pyramid!gould9!ncr-sd!sdcc6!sdcc3!sdchema!marcos
From: marcos@sdchema.UUCP (David A. Pearlman)
Newsgroups: net.invest
Subject: Re: My Collected Wisdom on Brokers
Message-ID: <508@sdchema.sdchema.UUCP>
Date: Wed, 11-Dec-85 20:20:06 EST
Article-I.D.: sdchema.508
Posted: Wed Dec 11 20:20:06 1985
Date-Received: Thu, 19-Dec-85 03:29:59 EST
References: <566@houxj.UUCP>
Organization: Biosym Technologies, Inc.
Lines: 44


> somebody mentioned a purchase of 2 or 3 shares of PG&E stock, and how
> you'd need a 300% return to break even. Actually, this trade is best
> done through a full-service broker, since they don't have the
> $25/35/45 minimums that discounters have...

In theory, this is good advice. However, in practice...
My experience has been that the non-discount brokers don't want anything
to do with you if you're not willing to make some sort of "significant"
trade to open your account. This is not a problem for me now, but about
9 years ago (I think), when I was younger (naturally) and had a lot less
cash to invest the following happened to me:

The father of a friend of mine had just taken control of a bankrupt concern
(I think the name was Penn Pacific), and advised me that it'd be a good idea
to get some of the stock if I had a little money to gamble (not "inside
information", just a positive outlook). I had $500 I was willing to gamble,
so I went down to my "friendly" neighborhood Merril Lynch office, where
I was told that it wasn't policy to open accounts for such petty trades.
I asked for a quote, and the broker I talked to said he couldn't find
the stock listed. I asked if he had checked the pink sheets (which I didn't
know much about at the time, but where my friend told me the stock was
listed) and the broker mumbled something to the extent of "what ARE you
talking about?" I timidly walked out and gave up (I know, my fault; but
I was young, and all my resolve to make the plunge was broken by the snotty
broker). At any rate, I forgot about the stock for a couple of years.
Well, a couple of years later, I was talking to my friend whose father
had taken over the company, and I asked how the stock was doing. I learned
that it had gone up 5,000% from the time I had tried to buy it!

No moral here. If *I* had been more persistent, I probably could have bought
the stock. But the fact remains: these high-commission brokers can be real
sh*ts when it comes to taking your money. I ran across the same thing
at a different office of M. Lynch several years later, when I was interested
in buying some 18% (or something like that) Pepsico 0-coupon bonds. When
the broker found out how much I wanted to invest, he basically just hung
up on me. Now I rely mostly on discount brokers: they may not be the cheapest
on everything, but they'll take your money and they won't bother you if
you want to make an off-beat investment (none of that "oh, I wouldn't do
that if I were you because Bernie in the other office heard that
Maggie over in corperate finance once had a friend who...; but I've
got a good tip on Baldwin United at $65" crap).

						David ("Dr. DAP") Pearlman