Oracle investor hit by plunge must end long hiatus from work
by Douglas Krauts-The Arizona Daily Star
The nation's financial wizards say all of us are bound to feel the effects of the "Black Monday" stock market plunge sooner or later.
Frank Pierson falls Into the "sooner" category.
The 40-year-old Oracle resident had been living solely--and quite comfortably--on the capital gains on his investments when the market collapsed Oct 19.
The next day, Pierson was scrambling for something that hadn't been a part of his life for more than eight years.
"Work," he said yesterday, speaking the word solemnly, deliberately, as though pronouncing a sentence.
"For the first time since 1979, I need to find a job. That's what it comes down to for me.
Pierson, who declined to give dollar estimates at his stock portfolio before or after the crash, said he suffered serious "paper losses" after deciding not to sell any of his stock during the trading havoc.
"The message of all this to me," he said, chain sipping cups of strong black coffee before setting off on the day's job-hunting foray, "was that my life was going to change In major ways.
"The handwriting on the wall was: I'd better get productive quick."Â
Pierson, who lives with his wife, Mary Ellen Kazda, in the community of about 4,000 across the Santa Catalina Mountains from Tucson recalled the sudden chain of events that changed his status from a man of leisure to would be working man.
I had heard that the market had gone down 170 points, and later I heard it had come back significantly," he said. "Then, about 3 p.m. Tucson time, I got a call from my mother (who lives in Philadelphia).
"She told about the 508-point drop in the stock market. I got a very strong feeling, at that very moment , that I wasn't going to be able to rely on capitol gains for my income anymore.
"By the next day, I was motivated to find work."
Pierson, who studied psychology at Earlham College in Richmond, Ind., and the University of Chicago, said he'll be a newcomer, but not a novice at the workplace.
"I became a community organizer in Chicago after graduating, from college doing things like building alliances between churches and community organizations," he said. "I did this kind of work all through the 1970's, while I was investing in the stock market."
Pierson said he had continued with community organizing activities on a volunteer basis in Oracle over the past eight years."
"That's the kind of work I'd like to find now," he said. "But also, during that interim period, I learned a trade - cabinetmaking. It has been a hobby sort of thing for me and my wife. But starting now, we're going to be trying to sell more of the things we make."
Pierson said he intends to stay in the stock market despite the bust.
"My approach is to buy good companies and hold on to them long term," he said, listing Pep Boys and Magma Copper Co. among his favorite investments.
He bought his first stock at age 12 - three shares of Campbell Soup Co. - and they tripled value in 18 months, he said. His father retired chairman of the department on economics at Swarthmore college, encouraged him to continue investing stocks.
"I don't try to call market turns," he said, acknowledging that his favorites plummeted in value along with most other stocks last week. "And I don't want to sell out now at these levels."
Pierson says he's taking the experience as a warning - and he advises the rest of us do the same.
"Capitol," he said, "is a scarce resource. The more we're dependent on paper profits, the more vulnerable our country becomes.
"We're enamored with the whole scene of financial gurus. But, that's deifying greed instead of concentrating on meeting human needs and producing useful products. If we think this whole thing was a temporary blip, then we're in deep trouble."
Of his re-entry into the working class, Pierson said: "I'm actually looking forward to it. I want to be productive. People like me ought to be working more.
"Anyway," he added, "there's no alternative."