Dick Davis is one of the most widely known and highly respected market commentators of his time. He founded The Dick Davis Digest in 1982, one of the nation’s largest investment news-letters, and pioneered stock market reporting via television and radio. Davis also wrote a stock market column for the Miami Herald―which was syndicated to over 100 newspapers―for over ten years. Born in Yonkers, New York, Davis lived in Miami for forty-five years and in Boca Raton since 1992.

The Dick Davis Dividend

Straight Talk on Making Money from 40 Years on Wall StreetBy Dick Davis

John Wiley & Sons

Copyright © 2008 Dick Davis
All right reserved.
ISBN: 978-0-470-09903-2

Chapter One

Personal Background

This chapter deals with those influences during my early years and during my career on Wall Street that directly impacted the underlying themes expressed in this book. This is not completely an exercise in ego. It is an attempt to explain how and why a particular set of beliefs has become so important to me. As you read this background material you’ll note one underlying theme: I’ve always attempted to break new ground.

I’ve tried to do the same with some of the content in this book, including this mini-bio. To those who say, “Let’s get to the meat; who cares about all the personal stuff?” I say, “No one cares about an author’s background if he has little of importance to say. But if what he says matters and is helpful, then knowing something about his background should add meaning to his words. I’m hoping I fall into the latter category.”

Pre-Wall Street

My childhood growing up in Yonkers, New York, was a happy one. We were a close family with loving, indulgent parents. In junior high I was president of the student council and won the Westchester County oratorical contest. My best friend was Biff Kogan, an awkward, sickly, shy boy who was unathletic and unpopular. I liked him because he was bright, caring, irreverent, funny, and sensitive. He kept a diary, which was published after his early death.

I was especially close to my twin sister, Ellie, a closeness that is even stronger today. Being boy/girl twins gave us lots of advantages. Without trying, we were thrust in the spotlight and given special status by peers and family. My parents encouraged me to always look after my sister, which I have tried to do. However, Ellie does far more for me, which truly makes her “the better half” (part of my e-mail moniker is “Eleanorstwin”).

I was a serious student, too much so. I remember my mother admonishing me, “Don’t study so much. So you’ll get a ‘B’ instead of an ‘A.'” What she didn’t understand was that the reason I studied hard was not to get an “A.” The reason had to do with a personal trait that has characterized most everything I’ve done during my lifetime, including the writing of this book.

I recognized early on that the world is full of people smarter than me, a lot smarter, but that I can achieve what they can, maybe even more, if I’m willing to work longer and harder. I realized that most people work nowhere near their full potential and that if I do, I can accomplish what they can’t. So in school and throughout my career, I put in a lot more hours than the next guy, not to get an “A” but to make sure that the result was the absolute best I was capable of. Like a horse with blinkers on, I was completely focused. I knew I could compete with higher IQs if they were operating on 50 percent and I was giving an all-out 100 percent. (I may hold the record for having the lowest IQ among straight-A students.)

In competition with more naturally gifted people, the best I could do might not be good enough. But that was something I had no control over. Everything I could do, I did without regard to the time it took. I could get away with this essentially selfish attitude during my career because I’ve lived alone most of my life. The beauty of this focused approach is that knowing you’ve left nothing in the tank leaves you with a deep feeling of satisfaction, regardless of the outcome. Whatever happens, happens. You’ve done your very best. But I could never make my mother understand.

Summer Camp

Summer camp was a major influence on all that came later. It helped shape my character and values. It instilled in me the self-confidence to think differently, to pioneer, and to persevere. Some 60 years after the fact, fellow campers are still among my closest friends. The camp has been closed for decades but we still hold annual reunions. We reminisce and sing camp songs arm-in-arm (to hold each other up).

The catalyst that made camp such a powerful and enduring experience for all of us was the founder and director, Barney “Cap” Girden. Cap was a bigger-than-life, rugged outdoorsman who came from the Henry Street settlements in lower Manhattan. He was a man’s man, a charismatic leader, teacher, and legend in his own time. A terrible businessman, he was always in debt because he was lenient with poor families. He was a physical fitness buff who wrestled and defeated the few counselors willing to challenge him. He was a student and lover of nature, a hypnotic storyteller, an inventor, and a dreamer. He instilled in us all a respect for nature, for ourselves, and for each other. He deemphasized athletics and focused on good fellowship and good sportsmanship.

I spent 15 summers at Camp Mooween (near Colchester, Connecticut), the last two as head counselor. I was picked by Cap to plan the daily activities for some 140 boys and supervise a staff of 35 counselors. I worked directly under Cap and was probably closer to him than anyone in camp. The camp itself was in an isolated, rustic but beautiful, wooded area on a large, pristine private lake with numerous islands and lots of fish. In the evening, I remember all of us taking the war canoe and paddling out to Dream Island in the middle of Red Cedar Lake under starry skies. The island was crowded with tall cedar trees, the ground was covered with a thick cushion of pine needles, and the air was punctured by the fragrance of pinewood and the croaking of bullfrogs. We would sit on logs that formed an Indian council ring and listen to Cap as he stood in front of the campfire under the stars and told us riveting stories of Indian chiefs and their brave deeds.

The powwow would end with various campers rising to recite the laws of the Mooween tribe. They included, among others: “Word of honor is sacred. Play fair; foul play is treachery. Be true to your ideals and respect the ideals of others. Be fearless. Courage is a noble attainment. Be not troubled by fears of the future; they are groundless. Listen well to your elders; they have much to offer you. Be kind. Do acts of unbargaining service. Understand and respect your body; it is the temple of the spirit….”

Our daily activities in camp helped to instill these qualities. Tests of courage would include sleeping out on Dream Island alone at night. To encourage a respect for nature, during thunderstorms, Cap would have us do a snake dance on the campus and ask us to clap in appreciation after each crack of thunder, calling it “the greatest show on earth.” The motto of the camp was “S-A-T-F” (“strong at the finish”) and the lyric of a camp song was, “Don’t give in, win all that you begin.”

Legion of Honor

Character development was so central to camp life that it was the basis for an evening activity once a week. On “Legion of Honor” night, we would get into bed early, turn out the light, and, in the dark, critique each other’s behavior. Each kid would be discussed by his bunkmates and by his two counselors and then have a chance to respond. Qualities discussed included pitching in; helping others, especially the poorer athletes; responsibility; initiative; sharing; telling the truth; and so on. If a kid showed improvement, the counselor would make sure it was mentioned. The tone was upbeat, not accusatory.

Following the discussion, the counselors decided which kids were put on the list for that week. Standards were high and most did not make it. Being a member of the Legion of Honor was prized more than making the first team. Those who were on the list for every one of the eight weeks were strong candidates for the camp’s biggest honor: the end of summer, all-around camper award. Cap was very careful in hiring his counselor staff (juniors and seniors in college). The Legion of Honor program worked only because the counselors genuinely cared about their kids.

Why couldn’t the face-to-face critique of each other’s behavior that we used so successfully in camp be used equally effectively in adult situations? Why couldn’t the Legion of Honor format be utilized, for example, by small groups of employees and their bosses to create a happier, more productive workplace, or by sports teams, military units, students living in college dorms, or even family groups? I used to wonder about this until I happened upon an article that contained one of my favorite insights about human nature by one of my favorite writers, essayist Roger Rosenblatt (a sometimes guest on PBS’s Evening News Hour). He wrote an article titled “Rules for Aging” in the May-June 1999 Modern Maturity magazine. Included was this nugget of wisdom:

Give honest, frank, and open criticism to nobody never. The following situation will present itself to you over and over: There is a friend, a relative, an employee, an employer, a colleague, whose behavior flaws are so evident to everyone but themselves, you just know that a straightforward, no-punches-pulled conversation with them will show them the error of their ways. They will see the light at once, and forever be grateful that only as good and candid a person as yourself would have sufficient kindness and courage to confront them.

Better still: From the moment you inform them about their bad table manners, their poor choices in clothing, their hygiene, their loudness, their deafness, their paranoia, they will reform on the spot. Their lives will be redeemed, and they will owe their renewed selves and all future happiness to you-honest, frank and open you.

I implore you: forget about it. When the muse of candor whispers in your ear, swat it, take a long walk, a cold shower, and clear your head. Nobody is thinking about you, unless you tell them about their faults. Then you can be sure they are thinking of you. They are thinking of killing you.

I hope the reader, in response to the advice offered in this book, will have a less assertive reaction.

The Camp Mooween campsite, along with scenic Red Cedar Lake, was made into a state park by the state of Connecticut in 2000, a singular honor for a summer boys camp. These words are inscribed on the plaque that appears at the entrance to Mooween State Park: “… this was a place of magic, care-free summers, balmy days among the cedars and golden hours on Red Cedar Lake; a place for building character, lifelong friendships and sweet memories; a place of endless summer and eternal youth …”

Along with Edwin Land, founder of Polaroid, Mooween’s most famous alumnus is lyricist Yip Harburg. I have to believe that when he wrote, “Somewhere over the rainbow, way up high, there’s a land that I heard of, once in a lullaby …” he may have been inspired, in part, by nostalgia for Camp Mooween. My older brother, Skippy, spent 21 summers at camp, both as a camper and then as head water counselor. In 2002, while driving his car, he had a heart attack and died. It had been over 50 years since his last summer in camp. The license plate on his car that day read “Mooween.”

Camp had a lifelong, profound influence, yet it only lasted eight weeks each year. The other 44 weeks I traded a clipboard and whistle for textbooks and homework.

One-of-a-Kind Career on Wall Street

My father’s jewelry manufacturing business prospered during World War II and we moved from Yonkers to Park Avenue in Manhattan. I went to Horace Mann School for Boys, a private school in Riverdale. My classmates included James Schlessinger, later Secretary of State; Sy Newhouse, head of the Newhouse publication empire; and Saul Zabar of New York’s Zabar’s Food Market. Then I went to Hobart College in upstate New York with my sister, but I transferred to Syracuse University in my junior year because I wanted to experience both a small and a big school. I remember I didn’t stick around for the graduation ceremony. I didn’t think it was fair to ask my folks to make a long trip just to see what would likely look like a dot among thousands of other dots crossing the stage to receive a diploma.

My father’s poor health brought us to Florida. With a useless-for-getting-a-job degree in English literature (my major because I disliked it least of all),my first job was in a cafeteria on Miami Beach as an assistant steward (a glorified bus boy). I made up my mind I would think of some business I could start on my own that had not been done before. I had no practical work skills but I had a creative mind. I spent hours every day conjuring up ideas, starting out with the thought, “Find a need and fill it.” In the evening after work, I would take long walks along the beach and just let my mind wander. I came up with some wild ideas, three of which I actually implemented.

We lived across the street from a long row of beachfront hotels. My first venture was a mail piece souvenir that I called a “TV-Gram,” which I hoped to sell to hotels as a giveaway promotion for their guests. Television was in its infancy and still a novelty. The TV-Gram was a greeting card with a picture of the hotel and an image of a TV set with the screen cut out. The guest put his picture on the screen and mailed it. The hotels agreed it was good PR but not worth the cost. I sold one hotel.

I thought my next idea had great potential. I had seen an ad for a floating golf ball. Why not set up a golf range on a hotel’s private beach for guests wanting to practice by driving golf balls into the ocean? It would be a first-time ever amenity for vacationers. The hotel would pay me to set up and run the operation, including the putt-putt boat retrieval service. The Fountainbleau showed an interest but the U.S. Coast Guard killed the idea before it ever got off the sand. They said it violated the three-mile limit for interference with maritime traffic.

My third idea met with more success. Would hotel guests rent books on the best-seller list? There were no rental libraries in the hotels, probably because it didn’t sound like something someone on vacation would want to do. I wasn’t sure. I convinced the newsstand operator at the Saxony Hotel to give it a shot. I bought the books and we split the revenues. The idea proved to be a winner, helped by a rainy stretch of weather in the early going. Guests from nearby hotels heard about the service and we ended up with waiting lists for the more popular books. Within a year I had a chain of rental libraries in the newsstands of a dozen of the leading hotels. I was labeled “the only legitimate bookie on Miami Beach.” In 1950 I was drafted into the Army and sold the business.

My quest for innovative, breakthrough ideas has never stopped. Some ideas have fizzled, some have worked out. Most remain in my notebook for another day (or because they just don’t sound that great on second look). Since retiring in 1989, I’ve continued to work on pioneering projects. It doesn’t cost any more to think on a grand scale, so my ideas are bigger now. Per haps my most ambitious project was to write this book. I had never made an attempt before because I am so painfully slow.

Career: Radio

During the Korean War I served in the Counter Intelligence Corp. After Japanese language school, I was sent to Tokyo where I worked undercover. As with others who were lucky enough not to see combat, the service was an enlightening experience that I look back on with pleasant memories.

After discharge, I decided to go back to school to acquire a skill I could use to make money. I enrolled as an accounting major at the University of Miami. When I finished there, I worked briefly for a CPA firm but didn’t like the work.

My next job was selling cigars (though I’ve never been a smoker). My father’s friend was a director of the Bayuk Cigar Company out of Philadelphia. He got me a job as a factory representative calling on retail cigar outlets in Florida to promote Phillies and Websters. The overriding problem in the cigar business at the time was a scarcity of younger customers to replace the older smokers who were dying off.

(Continues…)

Excerpted from The Dick Davis Dividendby Dick Davis Copyright © 2008 by Dick Davis. Excerpted by permission.
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