Area Investors Don’t Put Any Stock in Panicking

If you’re looking for a collection of cool cucumbers, talk to those San Fernando Valley investors who say they were unfazed by last week’s onslaught on the stock market.

Even as falling share prices sheared back gains in the Dow, Nasdaq and S&P; 500, some Valley investors say they’re getting more excited about the Dodgers.

To be sure, there were scattered reports of nail biting, pacing and frenetic phone calls to financial planners. Some investors, particularly novice day traders who seek to profit from momentary fluctuations in stock prices and often suffer during dips, may well be feeling the pain.

But in a series of interviews, mostly with members of area investment clubs who preach moderation and stability, the prevailing theme was that last week’s slide was just part of the great circle of business life.

“I’m not nervous. I’m not particularly happy, but I’m not nervous,” said Marvin Davis, a longtime member of the Valley’s branch of the American Assn. of Individual Investors.

Davis of Chatsworth said he did not lose a bundle on the recent stock slide, having cashed out some of his holdings late last year when the market was still hot. But the stocks that remain did not fare well Friday, he said.

“You have to be optimistic and say ‘One day, it will come back,’ ” Davis said Friday. “Maybe tomorrow will be better.”

It was, with the Dow gaining 276.74 points, or 2.69% on Monday, and Nasdaq closing up 217.87 points, for a gain of 6.56%.

And while not a complete reversal of misfortunes, it was an uptick, nonetheless.

On Friday, with the Dow posting its worst-ever point drop (off 617) and Nasdaq enduring its second-biggest percentage loss (9.7%), there was, one would think, much to cause the faint of heart to faint.

Early Monday, Sam Becker, a founding member of the Valley High Yielders investment club, was preparing to serve as host to Monday night’s ) regular monthly club meeting, the first since the market started looking decidedly nonstellar.

But Becker, also a member of the National Assn. of Investors Corp. (NAIC), a nonprofit support group for investment clubs, wasn’t planning to serve Tums with a Maalox chaser to the dozen or so Valley residents who are members of the club.

“Just coffee and tea and dessert, the usual things,” said Becker, who called last week’s tumultuous tumble “not that big of a deal.”

“In terms of points, sure it’s a big drop,” said Becker, who founded the Valley-based investment club four years ago. “But in its proportions relative to ’29 [the 1929 stock market crash], it’s nowhere near it.”

Becker didn’t even bother to check on his stock portfolio over the weekend, and talked to only one club member--a calm one--about the market’s daunting descent.

“My wife and I talked about it,” he said. “On paper we lost points, but we’re not worried about it.”

‘Growth Over Time’

Even among some day traders, the reaction was not widespread panic.

“Savvy day traders did not lose too much money,” said Richard V. Rueb, whose Web site, DayTraders USA.com, serves as a resource and networking outlet for day traders. “Day traders that started a month ago, or four months ago, might have lost some.”

Karen Glidden, assistant vice president for NAIC, said she’s gotten no frantic phone calls from any of the 650,000 individual investors and investment clubs served by the national office.

“Every time this happens, our members do not get excited,” said Glidden, who added that California has more NAIC chapters (10, serving 4,288 clubs and 49,974 individual members) than any other state. “The only calls we get are from reporters. Most of our members understand.”

Count Becker among the nonplused.

For now, Becker walks through the valley of the shadow of slumping stocks, fearing no evil. In fact, he picked up some Microsoft shares along the way.

The overall strength of the U.S. economy, resurging global markets, and the overriding principles of his national investment club comfort him.

“NAIC members are in it for the long-term,” a resolute Becker said. “For growth over time.

“Tonight we’ll share our experiences in the market, and certainly tonight will be a little bit more excited [than normal]. But we’re not going to dwell on it.

“Nobody I know of is jumping out of windows.”

While anxious investors who called the Sherman Oaks office of Morgan Stanley Dean Witter & Co. weren’t preparing for a fatal leap either, some were in a bit of a tizzy.

“It’s been a mixed reaction,” said Mark Bergmann, a Morgan Stanley financial advisor.

“Some said ‘Hey, I just want to know when it’s going to bottom out.’ Then you have other investors saying ‘I want to wave the white flag, I want to get out.’ ”

Bergmann said the company also has fielded a number of calls from potential clients who had previously traded online.

“They’re in a panic because they’re people that don’t have a relationship with an advisor,” Bergmann said. “They say ‘I need to get help now.’ ”

Some had borrowed heavily to buy very volatile stocks. Now, he said, those investors are facing “margin calls,” or requests for repayment of the loans. “So they’re having to sell their position.”

He said the office also has fielded calls from younger investors “who haven’t seen this kind of market before. Those are the people that are panicking.”

Like Becker and Glidden, Bergmann said the clients who are focused on the long-term have remained relatively calm.

“And that’s the larger group,” he said.

Helping more, especially new, investors see the value of the long view is the goal of Don Shorkey, who served for six years as president of the Los Angeles chapter of NAIC.

Eight times in the last 12 months, the Hacienda Heights resident has come to the Valley to help counsel new and growing investment clubs.

When he helped launch his own club in May 1987, it was just five months before the last big market rout, in October 1987.

He says he didn’t blink then, and he didn’t blink last week.

“We don’t care what the market does as such on any day,” said Shorkey, whose own investments have posted a 25% annualized return over the last 14 years.

“We strive to get a 15% compounded return five years into the future.”

“We look at a drop like this as being a buy, a bargain day,” he said.

Shorkey did head for the TV when he got home late Friday afternoon to get the latest update . . . on the Dodgers home opener (they won 8-1.)

“I don’t really pay that much attention” to news reports, he said. “If you ground yourself well and do good research, you will stay calm.”

Taking Stock of Investments

Six weeks ago, my dad began a campaign to convince me to move my daughter’s college fund to the stock market from its place of relative security--a CD earning a scant 4%.

“Trust me,” he said. “Trust me.”

This from the same man who assured me that there was very little danger of physical harm from removing the training wheels from my bike.

Good thing Mom had Bactine.

Up until now I’ve scrupulously avoided the market for the same reason I avoid Vegas, Magic Mountain and most sections of the 405--fear.

When you think of it, they are all essentially thrill rides. Take Wall Street, toss in free drinks and a Wayne Newton act and what do you get?

Seems obvious to me.

But, since I don’t want my daughter to spend her life working at Roscoe’s Steak & Chat, unable to afford a college education, I will relent, I will invest.

I will carefully read the prospectuses before forking over my future.

I will be aware that some reports may contain forward-looking statements regarding future events, and that actual results may differ materially from those projected.

I will buy low and sell high.

And I will keep a supply of Bactine on hand, just in case.

Valley@Work runs each Tuesday. Karen Robinson-Jacobs can be reached at Karen.Robinson@latimes.com.