Discount Broker Blues part 3 by Dan Weinberg The conclusion to Weinberg's experiences as a novice trader learning how to play the game the hard way. PURCHASE AND PANIC (PART TWO) Merger Mania is another form of Takeover Mania, but my example here is a wee bit different. As with Storer Communications, this time I thought I had an absolutely certain winner . . . (Are you starting to hear the melody of "The Discount Broker Blues" a little more clearly?) On January 31, I bought 100 shares of American Hospital Supply at the relatively low price of 315/8. The company manufactures and distributes hospital and laboratory supplies and equipment, and was—and still is—rated A + by Standard & Poor's. I don't recall where I got the idea to buy the stock, but by this time, I had become more proficient in researching and sizing up the companies I read about on the business pages of the newspapers. American Hospital Supply (AHS) has paid a nice 3.7 percent dividend and had a relatively low Price-to-Earnings ratio (10), both good signs. In addition, it had chalked up steady annual earnings increases since at least 1980. I felt confident that AHS would help make up for some of my earlier losses. |
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