‘I couldn’t believe that I finished fifth out of 7,500.’
The career of Robert M. Davis, 38, has taken many turns. He completed a business administration degree in real estate just as mortgage rates hit 18%. He switched from sales to real estate appraising, and fees plunged to $50 because of a glut of appraisers. Losses in the stock market persuaded him to return to California State University, Los Angeles in 1985, where he completed 60 units in accounting. Now back in the market, he recently finished fifth in a national stock-picking contest. Davis lives in Burbank with his parents.
I grew up in the Mt. Washington area, close to downtown. I did pretty much what every kid likes to do: baseball, tackle football, throwing rocks at other kids, throwing water balloons, taking fruit from trees, stuff like that.
I used to have a baby sitter, my next-door neighbor. Their name was Davis as well, but no relation.
When Mr. Davis used to come home from work as a lineman for the Department of Water and Power, before dinner he would read the financial tables in the newspaper. They didn’t mean anything to me, but I saw how much time and effort he would put into it. I bugged him and bugged him until he finally gave me a description of what the stock market was and how corporations work and how to read the financial tables.
He taught me the things that are pretty much common sense, like buy low, sell high. And, with single-digit stocks, how you could buy 10 shares or 100 shares, and, if it went from $2 to $4, you would double your money. He taught me a very valuable lesson, that somebody on a salary can supplement their income in the stock market.
In 1985 I decided to establish myself in the start-up phase of another business. I was going to go for an MBA, but I evaluated an MBA and job opportunities and scrapped that and turned to my own self-education process. I’ve been teaching myself technical, fundamental and psychological analysis, and I’ve learned about the gold mining and oil industries. I’m trying to establish my own financial consultant and money management business. I’ve taken this time of so-called unemployment, and I’ve turned it around to learn what is necessary to trade profitably. It’s like getting an MBA and Ph.D.: You forgo your salary for a lifetime of benefits.
I put in about 70 hours a week on financial inputs and processing. I spend six to eight hours a day watching financial and hard news on television and radio.
For me, the most important time of the day is between 3 and 5 in the morning. That’s when I get all my international news on television, while everybody else in the United States is sleeping. If I decide to trade, I can just stay up until the market opens. My normal sleeping time is about 5 a.m. to about 9 a.m. I get about five hours sleep, counting my catnaps, while watching movies at night.
I’m establishing a major reference library so I’m looking for books-- out-of-print books, current books. There’s nothing I like better than to find a $45 book for $3 at a library book sale. I’ve got the Wall Street Journal and Barron’s from 1982 to the present date in the guest bedroom. We’re on a major, once-in-a-lifetime bull market. I want to save as much documentation of the entire bull run from 1982 to whenever it stops.
I wasn’t going to enter the Barron’s stock-picking contest. I thought, “What chance do I have, small potatoes me against the pros and the veterans?” I entered it on the last day of eligibility.
I didn’t monitor the stocks during the contest. One morning I was only up about five minutes and had a mouthful of cereal, and I got a call from Barron’s saying, “Hey, good news, you finished fifth!” I was shocked. I couldn’t believe that I finished fifth out of 7,500.
How many people get their picture on the cover of Barron’s? The fact that I finished fifth establishes me as having a proven track record. It has given me name recognition. I must be doing something right.
I guess it’s like that old story: You plant an acorn, and it takes a long time, but once it grows, it grows into a producing tree.
