Merrill Lynch Is Banning Cold Calling. What I Learned as a Cold-Calling Broker.

Hello, Mr. Harris? This is Jack Hough calling from Merrill Lynch. No, sir. Not Maryland.

Hello, Mr. Harris? This is Jack Hough calling from Merrill Lynch.

No, sir. Not Maryland. Merrill Lynch. The brokerage firm.

I’ll be brief. We’ve been talking with folks in the area about how bank CD rates have fallen from 8% to 5%, and we’re showing them some alternatives that…Mr. Harris? Hello?

The hard part was catching the football. This was the early 1990s, and my first suit-and-tie job: making hundreds of dials a day for what was then called Merrill Lynch, Pierce, Fenner & Smith, and maybe more names I’ve forgotten.

This past week,

Bank of America

(ticker: BAC) said it was banning cold-calling by its Merrill trainees, and will encourage using referrals, LinkedIn, and in-house leads. About time, people are saying. But I’m thinking, there are leads? I could have used them back then.

The job wasn’t cold-calling, explicitly. It was to go find $10 million in deposits using only a phone, while hitting rising commission targets. The boss gave me an interview because I had sold one of his brokers an overpriced Tandy computer from the mall RadioShack the year before, which he found funny. “You’re too young,” he said. “But I must be having a moment of weakness, because I’m going to give you a shot.”

I had no connections. A midlevel broker gave me a tip. “Call cul-de-sacs,” he said. “Rich people live on cul-de-sacs.” “That makes sense,” I said, and I went to look up cul-de-sac in the dictionary.

It turns out I grew up on one, only we called it a turnaround, and we were decidedly not rich, which wasn’t a great sign. But it was my best and only idea, so I bought a street map and a reverse telephone directory, and began reaching out to Mr. and Mrs. Turnaround.

Apart from the calling, it wasn’t so bad. There were headsets, which made it easier to throw a football around the bullpen when the boss wasn’t there. Some guys chewed tobacco, but I didn’t have enough coordination to do three things at once.

If connections are valuable, so are street smarts and refuse-to-lose perseverance. But if you don’t have any of that, it turns out you get fired after about 18 months. I have no complaints. I made enough money to pay rent and buy three suits, plus a cellphone that was almost as large as it was unnecessary.

While failing in sales, I learned plenty about investing. There were classes for trainees, loads of daily research reports, and a squawk box, which back then was an in-house radio service, not a CNBC show. Pitching products is the old way, the boss said. The new way is financial planning. No churning, he said, which I took seriously, and not just because no one would send me money.

Just for laughs, near a VCR in the bullpen was a 1981 episode of Taxi, when gritty dispatcher Louie DePalma (Danny DeVito) gets a job as a stockbroker. “Have you decided what to do with your husband’s life insurance settlement yet?” he asks during a cold call. “I noticed in the obits this morning that he died last night.”

Now there’s a guy who could have worked wonders on LinkedIn.

“If you buy at the right price, SPACs can be a great risk/reward scenario,” says Rajiv Shukla, who has brought two of them public and is working on a third. “If you buy SPACs that are hugely run up…your thesis cannot be YOLO and diamond hands.”

Those terms are by now familiar, for better or worse. SPACs are special purpose acquisition companies, which used to be a niche tool for taking companies public, but have become a mania. YOLO stands for you only live once in Reddit chat rooms, and diamond hands is a metaphor for holding on to shares through volatility. If you got both right, give yourself four rocket ship emojis.

SPACs typically raise money at $10 a share before knowing what they plan to buy, and then have two years to get a deal done, or else return the funds. I’m more of a fundamental, bottom-up, know-the-name-of-the-company-before-investing guy, but different strokes, right? SPACs soared this year, then plunged, and now there are more than 400 of them growing gradually more desperate for deals before the clock runs out, which doesn’t seem to me like a backdrop for smart shopping.

But I wanted to give the bull case its due, so I reached out to Shukla, who had a successful turn bringing public


(DMTK), a cancer test company, and whose

Alpha Healthcare Acquisition

(AHAC) is buying Humacyte, which is working on bioengineered organs. “It’s like going to the dentist,” he said of an implantable pancreas that will one day cure Type 1 diabetes in an outpatient procedure where patients won’t have to be put under—that’s the plan, at least.

SPAC sponsors get paid in stock, and SPAC targets get a low-hassle stock listing, but what’s in it for ordinary investors? Shukla, whose investment platform last year bought a SPAC research service, says the average SPAC brought public in 2019 or later is trading around $13.

“It’s not like SPACs are destroying shareholder value,” he says. Early investors get the right to ask for their $10 a share back if they don’t like the deal a SPAC settles on.

Are SPAC targets souring on all the volatility? I asked Anne Wojcicki, founder of 23andMe. I lack the gene that makes people curious about their genealogy, but 23andMe these days is mostly focused on turning its vast database of genetic data—with customer permission—into medical research, revenue-sharing deals with drug developers, and subscription health services. It’s being bought by Richard Branson’s SPAC,

VG Acquisition


“Do I worry about short-term volatility?” Wojcicki said. “Absolutely not. I know our place in history, and I know the types of things that we can do.”

Write to Jack Hough at [email protected]. Follow him on Twitter and subscribe to his Barron’s Streetwise podcast.

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