At 6:45 a.m., stockbroker John Oppenheim walks into the nearly desolate Dean Witter Reynolds office in Woodland Hills. The New York Stock Exchange has been open for 15 minutes, and there is already a message waiting on his desk.
On this day, Oppenheim, 41, a broker for 15 years who doubles as Dean Witter's Woodland Hills office manager, will play his small role in the great bull market of the 1980s. Unlike the high stakes arbitrageurs who have been nabbed in the insider-trading scandals, Oppenheim and his investor clients are small-timers who inhabit a much quieter end of the stock market. "We're in retail," he jokes.
For most stockbrokers, it's been a great run since August, 1982, when the Dow Jones Industrial Average was at 800. As it has climbed to 2,300, both investors and stockbrokers have cashed in.
Last year, the 404,000 stocks, bonds and securities brokers in the United States had an average income of $80,000. Veteran brokers keep about 40% of the commissions their companies charge on stock trades. Oppenheim makes, he says, "in the six figures."
Lots of Competition
But there's plenty of competition, notably from discount brokers. An investor who buys 100 shares of a stock at $80 a share pays Dean Witter a $97 commission. At discounter Quick & Reilly, the commission for the same trade runs about $48.
Oppenheim tries to make it worth the added cost for his 900 clients, who live from Hawaii to Amsterdam, by serving various roles--by turns confidant, soothsayer, sounding board, financial planner and order-taker. Only 20% of his clients make more than one stock trade a year, he says, but they have $30 million invested in stocks, bonds, mutual and money market funds.
Oppenheim glances at headlines in The Wall Street Journal--the dollar's fall catches his eye--and straps on his phone headset. On his desk a Quotron computer terminal flashes the latest prices of about two dozen stocks. These stocks are Oppenheim's favorites, ones his clients have invested in, and he monitors them as a market barometer.
7:15 a.m. A client calls who wants to sell some General Public Utilities stock. GPU, which owns the Three Mile Island nuclear plant, turned out to be Oppenheim's best stock pick, he says. After the nuclear accident, when the stock was between $4 and $8, "I put my customers in it up to their eyeballs," he says. This morning, GPU's stock is at $26.
Oppenheim likes to find his own stock gems--"It's like buying straw hats in winter, buy what's out of favor"--not necessarily just those recommended by Dean Witter's phalanx of analysts.
The client on the phone owns about $60,000 worth of GPU, and wants to sell 300 shares. Oppenheim reaches for a red (as in stop) sell form. The buy form is green (as in go); an option form is white (as in surrender?). Oppenheim fills in the sell form and walks past the "bullpen," an open room where brokers work the phones at partitioned desks, over to the cashier's office, where a clerk types the information into a computer. Inside two minutes, the trade is done on the New York Stock Exchange.
7:25 a.m. Another client calls. He is worried about two mutual funds that Oppenheim steered him into a month before. One of the funds is down a tick.
This client, Oppenheim says, after six years dropped him for another broker, hoping to do better. "When I lose an account, I take it like I'm being fired," Oppenheim says. A month ago Oppenheim called the old client, he says, and discovered that the new broker wasn't performing magic tricks. He persuaded the client to come back.
Oppenheim, in a patient tone, reminds the client that he had a lot of cash sitting in a bank paying only 4.25% interest, and that he doesn't like making a lot of investment decisions. Oppenheim thinks that the client will earn more from these funds than from ordinary CDs. "I want you comfortable," Oppenheim says into the phone.
After a few minutes, the client is calm again. "Have a good day," Oppenheim says.
7:35 a.m. The stock market is down 17 points. "Jeez," he says.
7:52 a.m. Oppenheim calls and wakes a client. "Your gold stocks are doing very well," he says.
Despite the stock market's five-year surge, Oppenheim keeps trolling for undervalued issues. Recently he has recommended mining stocks, anticipating that the dollar's uncertainty might drive investors to gold, and some defense contractors because their prices haven't soared as much as the overall market.
Oppenheim tells his client about another gold-mining firm, and ticks off what the company will earn should gold hold at $400 an ounce. Bingo. Another sale.
Not a Longtime Dream
Becoming a stockbroker, though, wasn't Oppenheim's dream. After earning a master's degree in international business at UCLA in 1972, he envisioned working for Ford in Argentina. He had been looking for work six months before he walked into a Dean Witter office.