Cramer: What I learned about investing from the first millionaire I met as a kid

Published Mon, Dec 19 202210:04 AM EST

When I was a little boy, my dad took me to work every Saturday. He always worked six days a week, selling boxes, bags and gift wrap to retailers in the Philadelphia area. I loved going with him. He didn't talk much on the drive in, just listened to call-in radio shows and then the opera, the Metropolitan Opera, brought to you by Texaco. I learned to admire the singing and the music, by default I guess, especially the Ring cycle by Richard Wagner. Pop was always busy taking inventory and answering. Still, those were wonderful days because I was oblivious to anything about the business, especially how poorly it was doing. I just liked being with my dad, being called Jamesy, and having him hold my hand. Pop's company, National Gift Wrap & Packaging Company — renamed later to International Packaging Products because it sounded much bigger — never hit it out of the park, to put it kindly. But Pop did his best, three days a week, on the road, cold calling, and three days a week in the warehouse on 3 rd and Arch in downtown Philadelphia. I thought he was hoping for stragglers to come in and buy gift wrap paper. But it was always too expensive for them because it came by the roll not by the sheet. Pop was a jobber, a middleman who took orders from retailers and gave them to big mills. He had spare product, but it really wasn't meant for sightseers coming in off the street. He was mostly standing at the ready to help customers stranded without wrapping products: Scotch tape, he repped for 3M, stretch bands and American-made gift wrap. Pop's warehouse — he called it The Place — was four stories high, the ground floor a showroom, with all sorts and sizes of gift boxes and paper rolls, and the three above filled with inventory piled to the ceilings. My father had everything a retailer could ever need, especially to wrap a present, which is what mom-and-pop retailers always offered to do for you in those wonderful days, especially special occasions: Valentine's Day, Mother's Day and Father's Day, Hannukah and Christmas, wedding showers, and, of course, your birthday. He and his brother, Weegie, don't ask me why my dad called him Weegie — they are both long gone and I never found out why — split the inside-outside jobs of selling and manning the showroom. Pop shifted into seven-day-a-week mode from Thanksgiving through Christmas. You never knew what men's shop would be open and need goods, what clothing store would run out of holiday paper, and most importantly, what emporiums — Pop always called them that — would go through the printed bags that were his specialty. He was always there to help them. You can't give a customer a present in nothing. You needed a bag, preferably if you could afford it, one with your name and address on it. And if you ran out of those, you might have to close on one of the most important business days leading up to Christmas. Pop knew a customer could lose a tenth of that year's revenues if they had no bags for their merchandise on a weekend before the big holiday. My favorite part of those days? When client ran out of what they needed to put what the customer was buying in. An emergency! Pop would swing into action, put the "back in a flash" sign on the window and we would run to a place of wonder, a giant warehouse filled with all sorts of store and restaurant needs, run by a man by the name of Paul. His warehouse was much bigger than Pop's with more floors and cooler stuff, stuff like paper plates and cups as well as generic white shopping bags and giant reams of Kraft paper. In short, he had what these customers needed more than anything: blank shopping bags of all sizes that shoppers wanted so they wouldn't have to walk around with the gifts they just bought. These were special trips because Mr. Paul was so kind to me and really decent to Pop. Most of the customers treated Pop shabbily, at least the ones I saw and the ones I heard most about. But Mr. Paul was a supplier, a decent man, and most importantly a retired Marine Corps colonel. Pop was Army, a decorated sergeant, with a battlefield promotion to his name, like the tough guys on the ABC hit show "Combat!" back then. But Mr. Paul? He was the real deal because Pop always reminded me that as scary as his landings were, and there were nine hot ones, the tough stuff was always done first by the Marines — and to be a Marine Corps colonel meant that Mr. Paul was much braver than Pop. He always told me that even as I knew that Pop was the bravest man in the world. I would ask Pop whether Mr. Paul had a good business because he always seemed so busy (even though he was never too busy to talk to Pop). That's when Pop filled me in quietly about something magical and wonderful. He said Mr. Paul didn't just have a fantastic business, he saved up money, and when he had extra money, he would buy a stock with it. Always the same one. He bought shares in Merck, Sharp & Dohme, the pharmaceutical company. Pop had told me about the stock market. He had even taught me how to read the business pages of The Evening Bulletin, which nearly everybody in Philadelphia read, or so their slogan said back then. Obviously, they don't anymore because it went out of business years ago, but not before it could reject me for a job when I got out of college. I still have the rejection letter. Pop taught me to look up the names of companies — and, like the line of a baseball player in the box score, my real interest, you could see how they were graded that day, especially if Pop was so late from work that he brought home the five-star edition with the closing prices. The grades were incomplete in the three-star and four-star editions. So, I knew this Merck, Sharpe & Dohme, the predecessor to Merck (MRK), which is still called MSD outside the U.S. and Canada. It didn't do much. Not one of those high fliers. It just seemed to go up a little bit more than it went down. One day Pop asked me to summon up the courage and ask Mr. Paul to show him his stock ledger. He said if I did it he would buy me a ledger so I could pretend to buy stocks and see how I did. I was really shy back then; not precocious to save my life. But Mr. Paul was so nice that he didn't hesitate when I asked him if I could see his stock book, and he opened this dusty black ledger with page after page small blue lines, each line filled with a blue ink notation that said, Merck, the number of shares he bought, what he had paid and how many shares he had. I was pretty good at arithmetic but you had to be a numbskull to not be able to see that Mr. Paul had a gigantic number of shares bought at all different prices each month. Mr. Paul, in short, was a millionaire. The next day when I multiplied the number of shares I saw Mr. Paul had by the price at the end of the Merck line in the Bulletin business section, I realized he wasn't just a millionaire. He was a multimillionaire. I think his business was just something to do, that's how rich he was. From that stock. That Merck, Sharpe & Dohme. The other day on our "Squawk on the Street" set at the New York Stock Exchange, I mentioned to my co-host, CNBC's David Faber, that people could become millionaires buying stocks. He scoffed as only he can scoff, that twinkle in his eye, the sign that it was his job to scoff. He said it was very difficult to beat the market. I agreed, but I said it happens and when it does, it's fantastic. I said it worked if you were diligent, you were constant and consistent and you liked the company. I didn't talk about Mr. Paul or any of the other people I saw make millions of dollars on their own when I worked at Goldman Sachs (GS). The truth is we make far too much fuss about how hard this business is — and far too often we don't talk about those who quietly put their money away in good stocks and become multimillionaires like Mr. Paul. They don't show. They don't brag. They don't talk. Unless they are really nice to a little boy with his dad at their warehouse of wonder. Every day I go over the upgrades and the downgrades, the hits and the misses of companies large and small. We talk about the algorithms and the risk-on, risk-off garbage. We bother with S & P 500 levels and price targets of all sorts of stocks. Up and down. Down and up. We should be talking more about the Mr. Pauls of the world. The people who buy stocks, who reinvest and buy more and become millionaires and multimillionaires. Sure they are the exception. So are Marine Corps colonels. Believe me, it's easier to become a millionaire through a stock, though, than it is to become a Marine Corps colonel. Mr. Paul, bless his great soul, was both and he never bragged about either. It didn't matter. He didn't need to. He was just doing what he thought was right, including, above all, being nice to my dad. My dad was good to his word. He bought me a ledger, too. I kept a mythical portfolio. Until it became a real one. Thank you, Mr. Paul. Thanks, Pop. Everyone, have a happy holiday. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Jim Cramer at standing in front of the NYSE, June 30, 2022.

Virginia Sherwood | CNBC