Rational Investing

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23 April 2018

“Maggie the Cat” & the Telephone Stock, Pt. I


Her name was Margaret, but I called her "Maggie the Cat," a sobriquet picked up from Tennessee Williams' Cat on A Hot Tin Roof.

I used that nickname with good humor but respect because she was in her early eighties, a retired schoolteacher, English and American Lit, who marked and graded my letters to her with a red pencil, returning them with comments in the margin. In the early days of my providing investment help to her she sometimes even corrected my grammar during phone conversations, causing me to develop a diminished confidence in my linguistic abilities and a Pavlovian stammer when I was informed that she was on the line.

We had engaging conversations, halting though my side often was out of concern for being corrected. Shakespeare didn't write all his plays, Lord Byron was a fop, Steinbeck was a Communist, Burns was under-appreciated, and Vonnegut was a flash in the pan, she told me. She always had the upper hand, her years of studying and teaching literature easily trumping what little I learned during the required reading stages of my education.

When it came to investments I had the upper hand-or did I? Although my discussions with her on the subject (or perhaps they were debates) were always fortified with facts in favor of my position, Maggie the Cat frequently used her veto power skillfully to avoid taking my suggestions.

Additionally (and this was the most exciting part), I had developed a plan to get her to agree to diversify out of the AT&T stock that comprised almost 80% of her portfolio, a position she had held on to because the stock had been left to her when her husband died. He had spent his entire working life there and, because he enjoyed his job and the company, had accumulated the stock, sometimes only a few shares at a time, whenever he could find the cash.

One discussion stands out. Maggie the Cat had other business at the bank where I was the Trust Investment Officer, and called to let me know that she would be stopping in to visit with me afterward, no doubt in hopes of perhaps furthering my schooling in the English language.

In this instance I was looking forward to the meeting. By coincidence I had been reading Robert Frost, one of her favorite poets, so I was somewhat informed on the subject and actually felt I could hold my own unless she chose one of his lesser known works. Additionally (and this was the most exciting part), I had developed a plan to get her to agree to diversify out of the AT&T stock that comprised almost 80% of her portfolio, a position she had held on to because the stock had been left to her when her husband died. He had spent his entire working life there and, because he enjoyed his job and the company, had accumulated the stock, sometimes only a few shares at a time, whenever he could find the cash.

In spite of my best efforts, MTC had held onto it, refusing to diversify the investment, telling me she would never sell it out of respect for him. We chatted for a few minutes about the new teller and how difficult it was for her to walk down the stairs into the safe deposit area and then, as was often the case, she caught me-a misplaced modifier! I said that it was easier to avoid written mistakes, since they could be edited, but spoken grammatical errors couldn't be taken back. "Proper structure is important, young man," she said "It enhances communications and avoids confusion." Before she could say more I set the trap with, "You're right. It reminds me of the structure we saw in the old days of diagramming sentences. A skill, along with orthography, which should be part of language classes today, but sadly, is not."

I wanted to talk about orthography, but decided against it, knowing that it was more important to stay on track, so I asked her what she thought most important about the diagramming of sentences. "The understanding of the natural flow and the logic of the language." The trap was set! I didn't want to spring it too early and lose the impact, so I slowed myself down, asking her, "Is logic as important in language as in other areas, such as math or the social sciences?" She furrowed her brow slightly and peered at me over the rims of her glasses. "Of course it is, but where are you going with this?" She suspected something. I had not been subtle enough. No use trying to soften the approach. Might as well go for the close.

"If logic is important in language and math and social sciences, then what if we apply..." She leaned forward in the chair, this time her eyes widened as she looked at me through the glasses she had poked back up on the bridge of her nose. "No, Mr. Davis. No, no, no. Your obvious attempts at a Socratic method of persuasion will not lead me to agree to sell any of the AT&T stock. A clever attempt, but I am certain you can do better." "Ah, rats!" I thought, "now what?"

Next column: The Conclusion, or Maggie the Cat Teaches Me Another Lesson
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