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June, 2000


(A Father's Day Tribute)

Larry's paternal grandfather, Frank, affectionately known as "Papa Frank," exemplifies what can be achieved over time, despite hardship and low income, by careful, steady investing.

Born, we believe, on March 10, 1885, in his life he played several roles. He was an excellent musician, taking easily to new instruments and having a fine, rich singing voice.
Papa Frank holding Lawrence (Larry),
likely from a San Antonio visit
by his grandson, about 1945.

He was, as well, a fine carpenter and all around handyman, energetic in such activities well into his 70s.

He started his professional career as a teacher. Later, after being ordained in 1912, he became a preacher and, in this capacity, also helped to build up the Nazarene denomination, assisting with the founding and even literally the building of several churches.

He was also a successful investor. In the early decades of his life money was always tight. Yet, he began the saving and investment habit young, perhaps about 1910 or even a little before, starting with only a dollar here and a dollar there. Once he had $20 together, he would buy a share or two of stock. (Commissions were generally lower then.) Later he also began acquiring real estate at bargain prices. By such means, and reinvesting his gains and dividends, and despite the ravages to wealth of the Great Depression, eventually his assets had built up to the point that they were bringing in as much as or more than his work as a pastor.

But to save and invest the way he did, through all those challenging years, was far from easy. Those closest to him, his wife, Mama Pearl, and children, Leon, Lucile, Mabel, and Wilma, participated in the necessary sacrifices that made it possible. A few anecdotes may help illustrate.

Whenever he would buy meat for the family table, he would insist on the cheapest cut, which inevitably meant that with the most fat, the least lean. (My dad, Leon, hated fat so much that he became essentially a vegetarian, rather than eat what Papa Frank brought home for Mama Pearl to prepare as the entreé. Some may find this a little ironic.)

Like Larry, he tried to get the most out of his automobiles. Unlike him, though, he also got more than most out of his tires, driving on them, in the days of inner tubes, long before radials and annual inspections, until they were not only bald but showing the underlying web of thread onto which the outermost layer of tire rubber would be affixed. This sometimes resulted in high speed blow-outs. But Papa Frank felt that, when it came to driving, God would protect him. In that regard, the Lord never let him down.

I remember one time Papa Frank was helping Leon and the rest of our family move from near Rome, NY, to a suburb of Syracuse, where Dad was now stationed. Papa Frank's old car (a Studebaker?) had four bald tires and was loaded down with many of our worldly possessions. I was riding with him in the front seat. Behind us were furniture, lumber, and a variety of misc. odds and ends that fit into the extra spaces. Dad and Mom (Julia), along with (I think) Jeanie and John (and baby David? - not sure if he'd just been born yet or would be very soon), were in the other car. Leon (Dad) turned to the right just ahead of us, earlier than Papa Frank had expected. He slammed on the brakes, at which point we had a blow-out, ran off the road, and eventually came to a stop just before an obstacle, like a culvert or some such. Meanwhile, much of what had been in our back seat had rushed forward, missing our heads by inches; and I got an open box of Ivory Snow flakes down my neck and into my shirt. Everything was fine. We got the stuff back in place and put the spare on. But my parents insisted I ride the rest of the way with them.

When Dad was growing up and his father was a preacher, they lived for a time in Greenville, TX. As usual, Papa Frank sought ways to cut down on expenses. He did not have a car. So, he would often bicycle to the outskirts of town with his rifle, shoot rabbits, and then pedal them back for his family to fix and eat for supper.

Papa Frank, about 1905, probably from his college days.

Papa Frank was not big on women's lib. He would dole out the family budget by the penny, nickel, and dime. Mama Pearl, not just the preacher's wife but also the first born daughter of a pastor, a former teacher in her own right and a proud woman, would have to ask Frank for money to put into the offering plate on Sunday, for the church's support of missionary work. And she would never forget her shame and embarrassment that, while others were putting in quarters, dollars, or even five-dollar bills, Papa Frank would only give her a nickel at a time for this purpose. (More on Papa Frank's giving appears later in the narrative.*)

His fortunes had inevitable up and downs, especially in the stock market, which only very slowly recovered from the terrible beating of the 1929-1933 period, in which major companies had average losses of about 90%. But he was always on the lookout for great bargains and sometimes did extremely well. From time to time he would purchase real estate, and never lost money he put into raw land or residential properties. He would let the brokers in new areas, where they would move, know that he was in the market for foreclosure real estate and other similarly good deals. (As early as about 1932, when Leon [about age 20] went to build a shack on a piece of land in West Texas, a venture that turned sour after a bad injury or infection, I believe, it was on investment property that Papa Frank owned.) Sometimes the results of these purchases were very worthwhile.

Papa Frank's approach to investing had several key elements:

        1. Start early. Due to the magic of compounding, $1 invested now is usually worth more than $2 invested in ten years.

        2. Reinvest capital gains and dividends. This keeps assets working over the long-term. $1 with all gains and dividends left invested for decades, at just an 8% average return, is worth far more than if profits of 100% in the first year are spent on other things.

        3. Diversify holdings across categories and numbers of investments. In his case, when real estate holdings did not do well, at least some of his stock assets probably were going up, and vice versa.

        4. Invest year in and year out, not worrying about trying to time the markets. This "dollar-cost-averaging" approach means that, in general, you'll wind up automatically buying more shares when prices are lower, fewer when they are higher, with a consequent lower average cost per share.

        5.Seek genuine bargains, in whatever classes of investments you choose. If you buy $2 in value for $1, eventually you should do well.

There is one other significant factor in his style of financial management. He was (at least after retirement) very generous with his resources.

*In 1958, the fruits of his financial efforts having begun to pay off handsomely, Papa Frank gave the first of many gifts to the Nazarene denomination and its mission program, a donation of $100,000. It was such a noteworthy contribution at the time that the Associated Press carried the story throughout the country. As a benefactor, he probably gave more back to the church than he had ever received in payment from it. He also set up a large trust for Mama Pearl and his surviving children, Leon, Lucile, and Mabel.

Papa Frank from his Austin, TX, days,
likely about 1965.

In addition to earlier stock and cash donations, amounting to close to a half-million dollars, the estate he and Mama Pearl had built up, from practically nothing, and on a very limited income, was worth $1,000,000 when he died in March, 1970, at age 85. Back then a million dollars was still considered a lot of money!

Some may think Papa Frank was too harsh, unnecessarily tough. But they were tough times, times of men like J.P. Morgan, Henry Ford, Theodore Roosevelt, Joseph Stalin, Adolf Hitler, George Patton, Douglas MacArthur, Emperor Hirohito, Mao Tse-Tung, Benito Mussolini, Chiang Kai-Shek and Winston Churchill. Maybe tough is what was called for to get ahead then.

Leon and his father had their differences, and they were significant, but my dad would always speak with understandable pride of Papa Frank's financial success, acquired though he never earned more than $200/month, and often much less.

My father's father helped me learn to ride a bike, play shuffleboard, horseshoes, softball, and croquet, study insects and other small critters, and hammer in a nail with force and precision. I do not know how he was with his own young children. With his grandkids, Papa Frank was affectionate, patient, and fun. He had a keen intelligence, an infectious sense of humor, and an active, involved way of relating to others and to things that needed doing. He was a neat old man. If I'm lucky, he will also have helped inspire me to be a good investor.

(The above is based on Larry and his mom, Julia's, recollections. If others, especially Papa Frank's daughter and son-in-law, Lucile and Shelby, respectively, have either corrections or supplements they can add to the account, the new information would be most welcome.)


Larry is not a professional. Don't take him seriously!

Actually, the investment article provided here is for general information only and should not be considered as professional advice, a solicitation to buy or sell any security, or the Word of God. Investors are encouraged to do their own research while considering their personal goals and circumstances, or consult their own professional financial advisors, before making investment decisions. Neither Larry nor LARVALBUG will be liable for any losses sustained by any visitor to this site.

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