Growing Rich - Arabictrader.com

KIRK KAZANJIAN
He wrote four books during those early years, including America
Faces the Forties, which detailed his predictions about what lay ahead
politically and economically for the United States. Among those who
read the book was Thomas E. Dewey, then governor of New York.
Dewey was thinking of running for president of the United States at
the time and hired Davis to be his speech writer and quasi-economist,
since Davis had so many ideas about what was going to happen over
the next decade.
GOVERNMENT SERVICE
Dewey staged two aggressive campaigns but never made it to the
White House, losing to Franklin Roosevelt in 1944 and unexpectedly
to Harry Truman in 1948. When Davis returned from serving on the
War Production Board during World War II, he was appointed by
Dewey as Deputy Insurance Commissioner for the State of New York.
Before taking this job, Davis worked for a short time at a Philadelphia
brokerage firm, so he knew a little about stocks. He also had a shrewd
mind for finance. As Insurance Commissioner, he began to notice
that insurance stocks in the late 1940s were selling for extremely low
multiples. Eventually, he quit his government job and bought control
of a small New York brokerage firm. He renamed it Shelby Cullom
Davis and Company. Davis started with $100,000. Some was his own
money, the rest he borrowed from his wife. This was a tidy sum for
that time. He opened his doors in 1947, right when insurance stocks
began a decade-long run as the darlings of Wall Street. They were
like the biotech or Internet stocks of the 1990s.
INSURANCE EXPLOSION
Between 1949 and 1956, the great life insurance companies benefited
from rising interest rates and a burgeoning new market created
by soldiers coming back from war and starting families. The first
thing you worried about after having children in those days was life
insurance. With their growing offspring, the GIs became easy targets
for life insurance salesmen. Stocks such as Lincoln National Life and
Franklin Life experienced tremendous growth.
The media further helped to fuel this interest. An article in the July
1948 issue of Kiplinger’s Magazine - The Changing Times was head-
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