376: When the Spotters ...
Herb ’n’ Lorna, Chapter 17 continues
When the Spotters bought, the price of Studebaker stock was low, Studebaker sales were low, and the company had debts of more than fifty million dollars. When the Lark was released, the picture began to change. Larks sold. Studebaker stock rose. The company moved into the black. The Spotters did well. They did so well that, secretly, each began buying more stock on his own. The fact that they were investing individually came out when Simon Misch mentioned that he expected to be able to send his son to college by selling “some of his Studebaker stock.”
Herb was surprised. “I hadn’t really thought of it as being divided up that way,” he said. “But it does make sense. And it’s a good cause. I guess if we all agree to sell some, we could — ”
“Oh, I didn’t mean the club’s stock,” said Simon. “I — uh — I’ve been buying a little on my own — now and then — whenever I’ve got some spare cash.”
Others begin admitting it too. It was soon clear that all of them had been buying, and that they had been buying more and more heavily, using not merely spare cash, but money wrung from household budgets, withdrawn from savings, earned in overtime hours, even money from their children’s paper routes. They had all come to think that this was the chance of a lifetime, that they were never likely to run on the inside track again.
Then the “big three” — General Motors, Ford, and Chrysler — brought out their compact cars — the Corvair, the Falcon, and the Valiant. Studebaker’s advantage was lost. Sales began to fall. The company began an accelerating downward slide, like a runaway croquet ball in Chacallit, on its way down Ackerman Hill, headed for the chilly waters of the Whatsit.
Herb read the sales reports. He read the stock quotations. He read the company announcements. He listened to the rumors. He passed every scrap of information on to the Spotters, but he simply couldn’t believe the clear, solid evidence he found, because he had so thoroughly convinced himself that Studebaker was on the right track. He preferred to believe the most unlikely of the encouraging rumors, the wildest of the optimistic forecasts. So fervent was he in his convictions that, as the price of Studebaker stock fell, he persuaded the Spotters to buy more. Herb was convinced, and he convinced the others, that with a full range of cars to sell, from the sporty Hawks and rumored Avanti to the practical little Lark, the company was in a perfect position to appeal to the entire vast and various stewpot of potential car buyers. The company would succeed. The stock would rise. All the Spotters believed him, and Herb believed himself. He also invested more and more heavily.
Slowly, as time passed and the fortunes of the company grew worse and worse, Herb came to see that he had finally done the foolish Piper thing. The Avanti would never have widespread appeal. The Lark would never outsell the other compacts. Studebaker would not recover. The stock would not rise. The Spotters would lose their money. So would he and Lorna. Herb was ashamed.
[to be continued on Monday, November 7, 2022]
In Topical Guide 376, Mark Dorset considers Business: Competition Therein; and Life: Its Vicissitudes, Its Shames and Humiliations, Its Follies, Its Burden of Pain, Care, and Misery from this episode.
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