THE MORNING AFTER : For One L.A. Stock Trader, It Started at 3 a.m. With a Nervous Calm. A Few Short Hours Later, He Was Riding Yet Another Roller-Coaster Market.
It was about 6:30 a.m. Tuesday when stock trader Sy Leopold, peering through tinted lenses across the vast floor of the Pacific Stock Exchange, shouted his first order of the day: “Peppie, 500 hamburgers to go!” Somewhere out there, an investor had just unloaded a chunk of McDonald’s.
Leopold, who at 52 has been riding the stock market roller coaster for 31 years, had arrived at the exchange an hour earlier. Worn out after Monday’s record selling spree, he had gone to bed exhausted, but long before dawn was no longer able to sleep.
At 3 a.m., while his wife and three daughters were still fast asleep in the Leopolds’ Arcadia home, he had gotten up, read the newspaper and played an electric backgammon game before heading downtown.
About the time that Leopold was selling off 500 hamburgers, the first news from Wall Street was hitting computer screens at the Pacific Stock Exchange on South Beaudry Street. It was good news: A powerful buying surge that suggested a strong recovery from Monday’s 508-point drop that wiped out $503 billion of stock equity--almost a quarter of the Dow’s value.
But Leopold, a trader for Blackmore and Co. Inc., one of a group of brokerage houses that call themselves “$2 brokers” because they buy and sell stock for clients on orders from other brokerage houses, was not convinced.
“Anyone who says he knows what’s going on is full of it,” Leopold said as he scanned the big room with its institutional pastel walls, huge display boards and banks of computer terminals.
Life in a ‘Stress Business’
He added, “I just take it day by day. It’s bad enough, being in a stress business.” Indeed, Leopold, slightly overweight at 6 feet 2 inches, has recently suffered two angina-like bouts. On doctor’s orders, he gave up cigarettes and alcohol cold turkey four years ago.
After less than an hour of trading, the market was up more than 95 points above Monday’s close and traders on the floor began to speculate that Monday’s damage would be undone, that fears of a 1929-like depression were unwarranted.
One man on the Pacific Exchange floor Tuesday had a unique perspective on that. Jack Sillick, 79, who retired as a stockbroker in 1973 but couldn’t stand idleness and came back to work as a clerk, had been a brokerage house clerk in 1928, a year before he graduated from high school. By Oct. 28, 1929--when the Dow lost almost 13% of its value, ushering in the Great Depression--he was an experienced stock market hand.
Jim Sams, a 31-year-old broker, ambled over to Sillick’s desk as trading progressed and said, “Jack, you’ve seen two of these in your lifetime. . . .” But Sillick was not ready to concede that this was a repeat of history.
He spoke of how computers and other modern trading tools have removed emotion from stock trading. Further, he said, people today seem to be able to accept “this kind of disruption” in their lives more readily than they did in the late 1920s.
But was this The Big Crash once again? “We are just going to have to wait and see,” he said.
Nine o’clock at the stock exchange and there was more news from Wall Street: The Dow Jones industrial average, which had bounced back with a gain of 175 points in the first 90 minutes of trading, had dropped 28 points on a volume of 333 million shares.
About this time trader Craig Kievman walked onto the cavernous floor of the Los Angeles exchange, thrust his hands out to his sides and, in a reference to the recent conversion of the old Pacific Stock Exchange headquarters on Spring Street into a restaurant and nightclub, exclaimed, “Maybe they should turn this place into a nightclub!”
Others Break Into Laughter
Other brokers broke into laughter. It was a small moment of levity in a day that had started on an optimistic note but was quickly deteriorating.
For many of the young brokers, those in their 20s and 30s who were accustomed to seeing their investments turn to gold, Monday’s crash had been devastating. Leopold pointed to one young man, noting that he had lost $500,000 in the last two days.
Leopold shrugged. “We’ve had five good years. Everybody made a lot of money. They’re paying it back now.”
Like Sy Leopold, others in the stocks and bonds business had not slept well Monday.
After Monday’s trading, John Oppenheim, a branch manager for Dean Witter Reynolds in Woodland Hills, had observed that one client, whose account reflected a margin balance of several hundred thousand dollars, “is probably going to be wiped out.”
Tuesday morning, Oppenheim was still trying to reach the client, who was vacationing in Northern California and hadn’t yet been told. “It’s really depressing,” Oppenheim said.
By 10 a.m. in Los Angeles, the price of an average share on the New York Stock Exchange was down 7 cents, reflecting a modest comeback from Monday but a leveling off from the mid-morning resurgence. Losers led gainers 1,483-to-384 among the 1,984 issues crossing the NYSE tape.
Going ‘Step by Step’
Tension on the floor of the Pacific Stock Exchange had been building all morning, and was palpable. “You just have to take it step by step,” said Leopold, taking in the scene from his trader’s desk overlooking the floor of the exchange.
An observer could sense the ebb and flow as stocks surged, then retreated. “You can feel the lull, the quiet, the settling,” Leopold confirmed. Perhaps 200 people milled about the floor; a handful of the curious watched from the visitors’ gallery. This being the computer age, in lieu of the clatter of ticker-tapes, there was the glow of screens, an odd quiet.
Using body language--hands pointed toward them meaning “buys,” hands pointed away meaning “sell”--Leopold communicated with trader Joyce King. Everyone on the floor understands the language: A shout of “Apple!” means Apple Computers while “Motors!” means General Motors.
Trader Leonard Sacks stopped by Leopold’s desk and the two talked about perspective, how it seemed to have gotten lost in the events of the last two days.
On Friday, a market loss of 108 points had seemed like “a big deal,” Sacks observed, but after Monday’s debacle it seemed inconsequential. Now, the mid-morning 138-point rally seemed insignificant in comparison to Monday’s loss.
On a Natural High
Smoking and coffee drinking are not permitted on the exchange floor, which didn’t bother Leopold now that he had given up both. He’s on a natural high, he said, “It’s good for business.”
A native of Brooklyn who moved to Los Angeles in 1959, Leopold is an unlikely looking stockbroker. He wears his cordovan loafers without socks--for comfort’s sake, he explained, not because of any superstition--and, he says with some pride, “I don’t even have a high school diploma.”
By late morning, the market, which had gained as much as 200 points in early trading, had reeled back and was, briefly, 25 points below Monday’s close before climbing back to a gain of 86.52.
Leopold was staying calm. “Why bite your nails?” he asked. “You can’t do anything.”
Leopold carefully budgets his own market investments. On black Monday, he said, he made $15,000, adding, “I’m very happy with that. Other guys were losing their shirts.”
And he isn’t one to take his work home with him. “Once I leave here, I’m gone,” he said “You have 6 1/2 hours (the length of the trading day) to make your money or lose your money.” He unwinds by refereeing in a teen-age girls’ soccer league, his sole recreation.
Not a stock adviser, Leopold merely carries out buy and sell orders--with no contact with the buyers and sellers. Still, he frets about the development of institutional and computer trading, the loss of the sense of the small investor out there. He was carrying around some small odd-lot orders, diligently trying to get the best prices. “We’re missing the public in this mess,” he said.
Ahead of Monday’s Pace
With two hours to go, the Big Board volume had reached 465.47 million shares, well ahead of Monday’s record pace.
Leopold had been pondering what it all meant, the effect on the average person. “Joe Blow on the street, he doesn’t know anything about what’s happening here,” he said. But “if you’re a hustler, there’s no top to what you can make here,” he said. “This is real.”
As he had watched the market bounce back, then collapse again, 79-year-old trader Jack Sillick was philosophical: “The optimist sees the glass as half-full and the pessimist sees it as half-empty. All my life, I have been the kind of person who saw the glass as half-full.”
Day’s end, and the floor of the Pacific Stock Exchange was littered with pink slips--sell orders--and white slips--buy orders. There appeared to be more white than pink.
Less than an hour before Wall Street closed, Leopold, walking briskly across the exchange floor, said, “Can you imagine how those poor guys in New York feel? The bars must have made a fortune last night.”
Sillick, the 1929 veteran, was delighted. In the morning, he’d feared Tuesday’s market would turn lower. By the end of the day, he was reassured that the nightmare was not replaying. At least not yet.
“For a guy who thought it would go down, I’m just happy it went up,” he said. “And I hope that happens tomorrow, too.”
Just before 1 p.m., Los Angeles time--closing time on Wall Street--Leopold fielded a telephone inquiry from an anxious broker. “Before one o’clock you’ll have either an execution (of the order) or an explanation,” he assured him.
Already, Leopold was anticipating the next day. “I think it’s going to be up tomorrow,” he said. “The market seems to be settling in. I think we’ll have a plus day.”
