Financial History 140 Winter 2022 - Page 17

EDUCATORS ’ PERSPECTIVE

Will Rogers : The Oracle of Oklahoma

By Brian Grinder and Dan Cooper
Money never had a hold on Will Rogers . Although he made a fortune over the course of his career , he seemed to be more interested in giving it away than preserving it . His investing aspirations were largely limited to land . In one of his Weekly Articles from 1932 , Rogers wrote that he sometimes argued with his wife Betty “ over what little pieces of real estate investments we should try to pay on and hold , and which to let go back . As we blowed up higher than a Wall Street margin speculator , we said , ‘ Put it in land and you can always walk on it .’ We did , but no buyers would walk on it with us .”
Once when recalling his fondness for investing in ocean front property , Rogers justified his land obsession with the old adage , “ there is only so much of it and no more , and that they wasn ’ t making any more .” To which he appended , “ then when I hear Nation after Nation arise and announce the amount of coast line they had , it sure was discouraging to me .”
Rogers , with the help of his friend Eddie Cantor , fellow Ziegfeld Follies star and avid investor , bought stock sometime in 1928 . His only attempt to make money in the stock market was short-lived . [ See “ Caught Short : Eddie Cantor ’ s Lasting Impact on Wall Street ” in Financial History , Winter 2007 .]
The stock market was so puzzling to Rogers that he usually avoided it , but as he watched his New York colleagues “ just raking in money with a shovel ,” he couldn ’ t resist the temptation to take the plunge . Rogers wrote , “ I was hearing that Eddie was piling up a fortune that Rockefeller couldn ’ t vault over .” So , he called on Cantor at the New Amsterdam Theatre and told him that he “ wanted to get in on this skinning of Wall Street .”
“ I didn ’ t have anything particular against Wall Street ,” he confessed , “ but knowing the geographical and physical attributes of the street , I knew that it was crooked … I just said to myself I would like to be with the bunch that has the credit of straightening this Alley out .”
Cantor offered to buy some bank stock for Rogers . “ It ’ s selling mighty high ,” Cantor told him , “ And with this little dab you got here you won ’ t get much of it , but it ’ s bound to go up , for banks make it whether the market goes up or down .” Rogers agreed to the deal knowing that Cantor “ was the best financier we had in our profession .”
Rogers checked the papers every day to see how his stock market investment was faring . “ One little drop led to another ,” he recalled , “ till one day I received a letter from Eddie ’ s broker saying my check would come in mighty handy and for me please remit undernamed amount .” The losses bothered Rogers and even began to adversely affect his performance onstage . Finally , he could bear it no longer and asked Cantor to sell the stock .
Rogers admitted getting “ out with a very moderate loss .” The very next day , he reported , the stock “ went up big . But the whole thing is no place for a weak hearted Comedian , and from now on when Eddie wants to help me , he can just give me some of his old jokes .”
Rogers made at least two basic mistakes in his stock market venture . He relied on a tip from a friend , and he watched the stock too closely and bailed out as soon as the price dropped . This was a classic case of “ buy high , sell low .” 1
Cantor had a slightly different take on Rogers ’ s venture into stock investing . In his second autobiography , he recalled :
The first day the stock went up five points . Then it went up three points , then four . For 10 days . On the 11th day the stock dropped two points and Rogers phoned .
“ Hey , I thought you said that stock was going up !”
“ It ’ s gone up Bill ; It ’ s just dropped a couple of points .”
“ Get rid of it . I don ’ t want any stock that drops .”
Cantor sold the stock and sent Roger the profits , which Rogers promptly returned
Comedian Will Rogers invested in the stock market briefly with the help of his friend , Eddie Cantor .
to Cantor as a donation to a boy ’ s camp Cantor supported .
Rogers needed more than Cantor ’ s experience to keep him in the market . He needed someone more along the lines of Warren Buffett , who has often been compared to Rogers . 2 Buffett biographer Roger Lowenstein recalls one of Buffett ’ s first pitches to potential clients where he “ warned them that he would disclose nothing about where their money was invested . He would give them a yearly summary of results , nothing more .” He further restricted additions or withdrawals of capital to one day a year , December 31 , but he also made it clear that he would only make money if his clients made money . Buffett expected his clients to trust him and not worry about their money under his care . 3
This strategy was both audacious and brilliant . It was audacious because Buffett did not yet have a track record to rely on . It was brilliant because it helped his customers avoid the very “ buy high , sell low ” mistake Rogers made . Buffett ’ s preference that his clients and shareholders stick with him for the long term would have also benefited Rogers . When it came to stock market investing , the Oracle of Oklahoma clearly needed someone like the Oracle of Omaha .
In some ways , these two Midwesterners are a study in contrasts . Rogers
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