Vic & Laurel,

I am originally from the New York area and am now an attorney living in Florida. In the mid 80's, my family moved my grandfather from Queens, New York to Fort Myers, Florida because he was getting on in years and having trouble taking care of himself. The burden of looking after him at home became too great and we moved him into an adult congregate living facility a couple of miles from our home. At the time, I was running a mortgage company which I owned.

Grandfather was a stock broker all his life and worked well into his late 70's before retiring. His office was always with one of the brokerage houses dead center in the financial district. His employers included the names Spencer Trask, Hornblower Weeks, and some others I have since forgotten. He was born in 1900 in New York City and worked as a broker ever since around 1920. Grandfather was on Wall Street on the day of the 1929 crash and witnessed first hand all the mayhem that unfolded that day. He told me of the people jumping out of windows, however, he didn't see too many himself personally. He was afraid of heights because of a childhood accident of falling out of a 2nd story window and nearly losing his leg. Therefore, he pretty much stayed away from windows on higher floors of buildings.

I asked him about his personal experiences in those years and he told me an extraordinary story. Mind you, Grandfather died around 1990 and my conversation about the market with him took place around 1988 or 1989. My grandparents were always fairly well off, having owned their own home debt free since 1920 and putting both my mother and aunt through Pembroke College (now Brown University) in Providence, RI. in the early 40's.

My question was: how did he do it? Answer: Grandfather had a pretty decent size portfolio in those days. After all, he had a front row seat being a stockbroker on Wall Street. He noticed in the year before the great crash of 1929 that valuations were going up rather aggressively and that concerned him. The talk on the street was that the old rules were no longer applicable, that we were in an unprecedented era of economic prosperity and that now was the time to aggressively buy stocks. Riches, after all, were available to everyone now because the sky was the limit. Sometime in either April or May of 1929, Grandfather became overly concerned about the market. What he did was totally liquidate his entire stock portfolio at that time. His reasoning was that valuations were a little out of hand and that there should be a mild market correction beginning soon. After things came back down again, he would repurchase everything at a lower price and run the stocks up again. Well, stocks continued their upward momentum through the summer and Grandfather thought he might have made a mistake by selling out too soon. Fortunately for him, his gut told him to stay out. Well, I need not recount what happened in October, 1929! I asked him, "Pop, how did you KNOW???" His answer: "Pure luck! My gut told me things were a little out of hand, so I sold everything. When the market crashed that October, I was stunned."

When I told my mother about the story, she told me she was amazed that grandfather told it to me. She said that over all those years, he would never tell it to anyone. I guess he knew he was reaching the end of the line and he needed to tell it to me because he knew I was building a portfolio of my own. Because of his story, I completely missed the tech stock market crash of 1999 because I saw a remarkable parallel between his observations in 1929 and my observations of 1999! Hope you enjoy this ABSOLUTELY TRUE story about my Grandfather, Vincent Chiarello, now deceased, formerly of Richmond Hill, New York.

Sincerely,

James W. Hogg

Fort Myers, Florida