During times of adversity, it’s been said that when life gives you lemons, you make lemonade. As the New Year approaches, here’s a story about a time that persistence took the form of pizza.
The last few years have forced many people to make hard choices due to the changing economic landscape. These are cyclical events. During the mid-1970’s, the aftermath of Watergate, rampant inflation and the energy crisis saw many Americans placed in the cross hairs of an economic meltdown.
A small stock brokerage was scuffling during this time period with few clients – eventually coming to function from the homes of the founders. Fortunately, the partners had made some real estate investments. The two main holdings were a pair of stand-alone store locations – one on Long Island, N.Y. and another in Central New Jersey.
The owners considered investing with a restaurant franchise, but no partners were available for that type of cash outlay. After some further research, they settled on opening pizza restaurants.
Before long, the stockbrokers were running full service restaurants. The real estate was in great traffic areas and the locations thrived through their efforts – turns out they flipped pretty good pies for a couple of stockbrokers.
For three years, they took turns serving regular shifts at each restaurant while still maintaining their licenses so they could keep serving their brokerage customers. Eventually, an employee in each location was interested in taking over the business and rental agreements were set up.
With the economy slowly starting to turn around, and with the pizza profits, the partners could try getting back to their full time vocation. They also saw an opportunity in a new investing trend – discount brokerage services.
Some of the funds were used to open a small office in New York and also on some marketing. One partner served as the research analyst and felt he could write a simple monthly newsletter.
The partners decided to place a small ad schedule in The Wall Street Journal. The pitch was to fill out and send in a coupon with contact info. In exchange, the firm sent two free months of the newsletter along with a description and pricing for their discount brokerage. Before long, coupons were flooding in and the business grew.
Within 10 years, the brokerage had grown exponentially, was sold and merged into a banking corporation. The unexpected journey into pizzas and subs had enabled these brokers to weather the storm and have the funds to re-invest and market their return to stocks and bonds.
The partners were brothers and the one that wrote the newsletter was my father. His choice to make pizza, support his family, and find a way back to his profession is similar to choices many are making today.
Our whole family worked the pizza restaurants and I spent many days after that helping at the brokerage with small tasks. If not for his investing acumen, and the experiences he and my mother (who also went back to work) gave me, I would not be able to follow my own persistent path now.
My father never left the investment world after that. He worked at a couple of firms and was managing portfolios right up to the end of his life. Late 2011 will mark 10 years since his passing. Thanks to my parents, I always had a pizza with everything.