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Rare Coin Market Update

Rare Coin Market Update #24 (Archives)

Investing ...What Groucho Marx Taught Me?

by James DiGeorgia 2015-02-28 11:51:08

I was blessed with a fascinating childhood.

My father was a gifted brass musician who attended The Manhattan School of Music and The Juilliard School in New York City. Later, he played the trombone with Glenn Miller, and Tommy Dorsey before the Second World War.

After the war, he toured with Broadway shows like "Lassie," "King and I," and was a member of Jack Benny’s orchestra for a year.

One of the best jobs he had was completely out of character from his big band and classical music background. From 1966 through 1971, he played in an oompah band six nights a week at Luchow’s on 14th Street in Manhattan, one of the most famous German restaurants in the world.

It was here that I met a famous comedian with a talent for so much more than telling jokes …

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Wonderful Times With
My Dad’s Oompah Band

My father shared friendships with many classical musicians including Vladimir Horowitz, whom he met at Julliard and performed with as a guest musician with the New York Philharmonic and Carnegie Hall on several occasions.

Yet, despite his mastery of more-serious music, Dad loved playing German oompah music. As a Jew, he said playing that music was a way to celebrate the defeat of the Nazis.

Over the years, virtually every musician who played in his oompah band was a Jewish orphan and Word War II veteran, who grew up with him in a Hebrew orphanage on the Upper West Side.

Dad’s connections led to him becoming the Music Director for the World’s Fair in 1965. He also managed to land an oompah band gig with Lowenbrau’s German Beer Garden, which was part of the German exhibit at the Fair.

After the World’s Fair closed, Lowenbrau saw to it that Luchow’s hired my father’s band.

Famous Friends at Luchow’s

I loved going to Luchow’s on Friday and Saturday nights with my dad. After the Broadway shows, some of the most talented people in the world would come to dinner such as Danny Kay, Red Skelton, Phyllis Diller, Jack Benny and many others.

When they came, they would spend a good 15-20 minutes teasing and playing with me. I was very young at the time, and enjoyed these colorful visitors.

Many of them brought little gifts for me. Sometimes, it would be a piece of their memorabilia wrapped as a gift.

Jack Benny gave me a violin on one occasion. Bending down to look me in the eye, he told me:

"You don’t have to ever play it to become a huge success, kid. I know — I’ve been carrying it around for years and never have actually played."

A room full of people responded with gut-wrenching laughter.

Luchow’s: Where the magic happened

With so many celebrities taking the time to spend with me, I rarely became bored.

On Friday and Saturday nights at 11 p.m., Luchow’s would turn into a place of singing, laughter and great joy accompanied by draft beer and wine.

I would eventually collapse in a corner booth by 3 a.m., but trust me; I tried to stay awake as long as I could. I didn’t want to miss anything.

Marx Makes His Mark

One of my favorite celebrities came in a few nights for dinner every time he came to New York: Groucho Marx.

My mother had became close friends with one of his nieces over the previous 20 years. My dad had met Groucho back during his big-band days, and they seemed to be very fond acquaintances.

My dad treasured a few choice handwritten letters that Groucho sent him throughout the years, just to let him know he was heading to New York or to say he was thinking of him and wished him well.


Groucho would always greet my dad with a big smile when he would arrive at Luchow’s and say: 

"Teddy, I see you’re STILL sticking it to Hitler!"

I was 8 years old at the time, and just starting to recognize who Groucho was. To me, he was a kind, thoughtful and funny man who’s who made movies that were starting to run on Sunday afternoons on TV.

These days — and especially around this time of year as we approach the anniversary of his death: Aug. 19, 1977 —I realize he went out of his way to give me so much attention, even when he arrived with other very important or famous people.

His influence, however, stretched beyond making a young boy feel special. He also is a big part of why I do what I do for a living today.

Groucho was one of the first adults I ever heard seriously discuss investing and the stock market.

One night in the summer of ’69, soon after Groucho had gone through a divorce, he arranged a special dinner at Luchow’s Restaurant. George Burns, Sid Caesar, Jack Benny, Milton Berle and Alan King attended.

A fabulous 19th-century mahogany bar room was blocked off and a large table set up just a few feet away from my "go-to-station" — the spot I where would hide when it became very busy and I needed to stay out from underfoot.

Fortunately, my spot that night positioned me perfectly to hear everything that was said.

The Funniest Men Alive

The stories these amazing men spun back-and-forth that night were so funny, my belly hurt from laughing.

As they finished and moved on to smoking, drinking and digesting, they started debating which one of them was the funniest. You could imagine the hilarity that followed as each one insisted he was the funniest.

As the night wound down, Groucho confessed that though he was certainly the funniest man alive (to which everyone at the table cracked up), he was the worst at matrimony, to which George Burns replied in his gravelly voice:

"But you were always a good investor, so at least you have money to marry and divorce as many wives as you can possibly want."

Groucho retorted:

"Between my horrible poker play and the ’29 stock market crash, it took many years to gain the smarts to keep my investing simple."

In his 1967 book, "The Groucho Letters: Letters From and To Groucho Marx," Groucho writes a letter to his brother Harpo (Adolph) that backs up his assertion about his investment acumen and philosophy that night.

In response to his brother’s inquiry about the best way to invest $100,000, Groucho wrote:

Dear Adolph,

Remember once, way back in ’29, when I suggested a few stocks that would, in time, place you in the same class with Andrew Mellon, and Diamond Jim Brady? It was but a few months after this that you were wiped out.

Yesterday at luncheon, your brother, Dr. Gummo Marx, had just returned from the dentist’s where he had a few of his teeth filed off and naturally was in a more apprehensive mood than he normally would be.

Not knowing how much money you are worth, and seeing no reason why I should, it is difficult for me to give you the benefit of my wisdom. I can only tell you that as far as I’m concerned, if I were to invest $100,000 in a project, it would have to be something like AT&T or Standard Oil of New Jersey.

Take this for what it’s worth, but remember, someday when you come creeping to my front door asking for alms for the love of Adolph, don’t say I didn’t warn you.

I’m glad you are in almost perfect physical condition, and not tossing that 100 grand into the crumbing sands somewhere east of Indio will surely help to keep you that way.

Sincerely yours,

Jeffrey T. Spaulding*
(*Groucho’s character in the film, "Animal Crackers.")

As it turned out, Groucho was a very competent investor. He liked cash-generating stocks that paid dividends.

That same night, I remember him pressing this point to the other comedians who gathered and leaned in around the table to listen to his wisdom …

He said he always focused on companies that pay their dividends, and have a history of increasing their dividends.

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I’d like to think that if Groucho were alive today, he would be glued to our recommendations.

Imagine Groucho as an Investor Today …

Groucho has come up frequently over the years in my conversations. And I always tell people that, yes, he was probably one of the funniest men ever, but he was also a forward thinker.

In 1954, from his book, "The Groucho Letters," he wrote this letter and excerpt entitled, "To The President of Chrysler Corporation." It reads:

Dear Mr. Colbert:

Each year, the motor manufacturers hammer home the idea of more horsepower. I realize a reasonable amount of power is necessary, but I think it would be much smarter if emphasis were placed on safety rather than additional speed. Perhaps the ads next year should read, "prettier, faster and safe."

I also think that if a device could be installed on the carburetor (I understand there are such things) that would eliminate the belching of carbon monoxide through the city streets, the Chrysler Corporation could create an enormous amount of good will, particularly in big cities where the carbon monoxide problem is especially acute. …

Your new cars look good, but the fact of the matter is that all the new cars look good, and I firmly believe that the first automobile company that starts stressing safety instead of speed will win far more than its share of business.

Sincerely yours,
Groucho Marx

Groucho, accused of being a communist in the mid 1950s, was in fact a capitalist and a futurist.

His suggestion about safety and reducing exhaust emissions in this letter to Chrysler’s president demonstrated his concern for the general welfare of the American public and their health.

At the same time, he had the insight that marketing cars with safety and environmental benefits would be a profitable business policy.

He was right.

I miss you, Groucho. I was just a child when I knew you and shared your company, but I know you are holding court in heaven and making angels laugh into the wee hours every night.

And though Luchow’s is long gone and NYU’s University Hall was built in its place, I’ll never forget everything I was lucky enough to learn there. It was an honor and a pleasure, and I’m thrilled to be able to share those wonderful moments and ideas with our readers.

Always Watching Your Chickens,
James DiGeorgia