Author: A.T.

With respect to the column I titled Can the Market Keep Climbing?, I got one pat and one pan. “Ahh, Andy, Andy, Andy,” wrote Dan H. Oops, I figured — I’m in trouble. But no. “If only I had listened to this kind of thinking in August 1995 when I had just succeeded in turning my one-stock portfolio (SGI) into a cool $1,114,000, rather than today’s $116,000. Perhaps someday I’ll write you the definitive cautionary tale about letting the tax tail wag the investment dog. [I presume this means he failed to sell in order to avoid paying capital gains tax.] Hopefully, a few people will recognize themselves in your column and it will make some kind of difference to them. Alas, there will be those pesky Emerson fans who will quote his, ‘Put all your eggs in one basket, and then watch that basket.’ The problem is, people fall in love with the basket, and they start watching the basket instead of watching the damn eggs.”

I’m not sure I follow that last little bit — especially if he had just one egg in his basket (SGI). But I’m not going to quibble when someone agrees with me, let alone the brother of the husband of the daughter of the chairman of the Senate budget committee, Pete Domenici. (In a P.S., Dan reveals this connection and says he passed on my stuff about the recently introduced Auto-Choice bill to Senator Domenici. Go, Dan!)

I fared a little less well with my friend Less Antman, whose opinion and insights I regard very highly, but who doesn’t seem to be related even to a subcommittee chairperson, let alone Domenici, so I don’t mind sparring with him from time to time.

Less writes:

“Far be it from me to give you a tongue-lashing for trying to time the market again, especially since anyone who would follow your advice today probably already followed it in the past and has nothing left in the market to sell at this point <g>.”

The <g>, as you know, stands for “good-natured grin,” which is of course exactly how I take it. I don’t think I ever told anyone to sell all his or her stocks, and I haven’t sold all mine. But it’s true: I’ve sometimes suggested lightening up, or selling half in your tax-free account, or shifting some to overseas funds — and I’ve frequently suggested not owning stocks at these levels on margin, or with money you might need in a year or three. (Less agrees with me on those cautions, so, as usual, there are only subtle distinctions between his point of view and mine-such as that I’m right and he’s wrong <g>.)

“Remember Paul Samuelson’s joke about stock market declines predicting 9 of the last 5 recessions?” Less’s message continues. “Someday, you will be immortalized for having forecast 20 of the last 2 bear markets <g>.”

I’ll admit there are things I’d rather be immortalized for. (“The man who invented the clickle,” perhaps, or “the man who went on at such length about auto insurance reform they finally just threw up their hands and enacted it to get him to shut up.”) But immortality doesn’t come cheap or easy, so if it has to be for predicting 20 of the last two bear markets — even though I have forecast only one bear market, and am 100% right that it will come exactly when I say it will (“someday”) — so be it.

In hindsight, of course, my caution has proved unnecessary. It was born of the period 1968-1974, as I watched stocks descend from euphoria to an environment in which many sold at six times — depressed — earnings. (Yes, Virginia, there was such a time.) These last five years, by contrast, and with hindsight, you should not only have kept 100% of your long-term money in stocks, you should also have committed your short-term emergency savings to the market, and then levered to the hilt with margin (just so long as you didn’t fill your portfolio with SGI). You should also have dropped your fire insurance, as it turns out, since your house did not burn down.

But the next five years? Well, the same terrific macro trends are in place: lower nonproductive expenditures for defense, freer trade, near worldwide acceptance of market capitalism, astonishing technological advance. But none of this is a secret, and the stock market seems already to take much of it — perhaps even too much of it — into account.

Less understands all this at least as well as I do, yet believes one should never attempt to “time” the market (guess when it’s time to get in and out) — a view I, too, have long largely espoused.

Indeed, an awful lot of people now espouse it . . . and that may be a problem. If not today, one day. It’s just when everyone catches on (and when they invest in stocks not based on value but on, say, their need to build a fortune in the relatively short time remaining before retirement), that markets have a way of becoming uncooperative.

“Let me explain why this hold-for-the-long-pull tactic will self-destruct if ever it becomes universally believed in,” wrote Nobel-prize winning professor of economics Paul Samuelson in the Fall 1994 Journal of Portfolio Management. “If you adhere to the dogma that stocks must beat bonds in the long-enough run, there is no P/E level . . . at which you will take in sail [lighten up your holdings]. A ponzi bubble is ever possible, and given past psychologies of boom and bust, ever-higher P/E ratios become a self-fulfilling prophecy. I cannot prove to you that every bubble must burst. After all, anything can be carried on to twice where it has already reached. But . . . at high enough P/E ratios, equities will cease to display in the future their historical superiority over bonds.”

This is not to say Samuelson saw the market, at its mid-1994 level, as a bubble about to burst. Or that he sees it that way now that it’s doubled. But because he was writing about the difficulties in “active asset allocation timing,” he was afraid his readers might “think I have climbed on today’s bandwagon of Become a Long-Term Investor Who Buys and Holds in the Confidence Acquired from History, Which Assures that Stocks Do Better in the Long Pull than Non-Stocks Do.”

“As will be seen,” he continues, “I give two cheers at most for this new dogma. There have been worse dogmas. And there will be worse ones to come. However, as I shall explicate, once everyone comes to believe in and act on Always Hold Stocks, that tactic will self-destruct in the way that the Tokyo Equity Bubble self-destructed after New Year’s Day 1990.” (The Nikkei Dow was 40,000 then. Seven and a half long years later it is 20,000 — and that’s up a lot from its low.)

We are not at “Nikkei 40,000” — a long way from it, in fact. But it is to keep from getting there that Alan Greenspan and Warren Buffett and such are sounding notes of caution.

Invest . . . invest for the long pull . . . invest partly or largely in stocks . . . but not blindly. Samuelson’s 1994 equation-laden article is entitled: “The Long-Term Case for Equities (And How It Can Be Oversold).”

#

One last thing to say, in fairness to Less. He rightly pointed out that my earlier column was flawed in the simplistic way it equated profit growth with growth in stock prices. Most public companies reinvest all or most of their earnings — these days, often, by buying back some of their own shares — so that when profits rise 5% (say) profits per share, and hence stock prices, may rise faster. Less has a lot of interesting things to say on this point, and has done a better job of thinking about it than I have. If I ever feel I understand it well enough, I will share his comments with you — and poke as much fun at him as I am able <g>.

Friday, I confirmed your growing suspicion that I am a lunatic — and was so from a very early age. Today, let me get to the point. Among the books I dusted off were a whole series from the ’70s and early ’80s. Remember those years? Our national confidence was not what it had once been or would be again.

Here were the titles, several of them national best-sellers: The Coming Credit Collapse (Alexander Paris, 1974); The Coming Deflation by C.V. Myers, 1976; 99 Ways to Make Money in a Depression (Gerald Appel, 1976); How to Prosper During the Coming Bad Years (Howard Ruff, 1978), and, when they didn’t come, Survive and Win in the Inflationary Eighties (Ruff, 1981), which turned out to be perhaps the most disinflationary decade in our nation’s history. Crisis Investing (Douglas Casey, 1980), which foretold economic collapse by 1983; The Coming Currency Collapse (Jerome Smith, 1980); The Great Money Panic (Martin Weiss, 1981); How to Survive and Grow Richer in the Tough Times Ahead (Thomas Holt, 1981), when in fact the market and the economy bottomed the following year and then began its more or less astonishing rise ever since.

One of my favorite titles in this genre, from 1976: You CAN Survive any Financial Disaster: Strategies to Beat Triple-Digit Inflation, Severe Depression — Even Wartime Catastrophes. Isn’t that great? The world is going to hell in a handbasket, and you can make a lot of money while it does!

One more, from 1980 — Get REALLY Rich In the Coming Super Metals Boom, where the word “really” was underlined, getting rich being a promise almost any book could make, and the word “Coming” was crossed out — because, really, who wants to wait? This one referred to strategic metals like chromium, critical to the production of stainless steel, bismuth, zirconium and so forth. The notion that paperback book buyers would in fact be able to profit from this coming boom was almost as absurd as the timing of the book itself, which appeared — surprise, surprise — at more or less the top. Anyone buying into this strategy would not have gotten rich but, rather, hosed. REALLY hosed.

(I actually met the author of Get REALLY Rich, Gordon McLendon. He was a Texan with scores of drive-in movie theaters in places like, oh, say, downtown Dallas. The drive-in business, he told me, is really just a way to warehouse land while it appreciates. By the time he died, his had appreciated considerably. This strategic metals book was just a lark, no doubt inspired by the killing he had made on strategic metals. If only he had written us this book ten years earlier, at the bottom instead of the top.)

There were other books I had not even remembered owning, some of which I consigned to a pile destined for some unsuspecting library.

It was onto this pile I was about to throw The Battle for Financial Security: How to Invest in the Runaway 80’s by someone I had never heard of named Rodger W. Bridwell — who are all these people? where did I get all these crazy disaster books? — when I noticed the blurb on the back. It was by me.

This highly readable investment guide brims with the kind of good sense and perspective that’s worth a shelf of more technical stuff. Rodger Bridwell’s outlook is admittedly bleak — ever-increasing inflation that it is too late for us to lick — but his advice most decidedly is not. No $800-an-ounce gold bullion for him . . . no howitzers surrounding isolated rural fortresses . . . no hedges against ultimate social collapse. Instead, he outlines a practical, plausible way to get rich, or at least beat inflation, by investing in, of all things — productive assets. Stocks.

This is a book I picked up with considerable skepticism and then could not put down. As neither will anyone else with a few dollars in the bank.

Whoa! Wish somebody would give me a blurb like that.

I had no immediate recollection of this book or writing that blurb. Only when I closed my eyes really tight and thought about it as hard as I could was I able to dredge up some vague recollection. Still, if I had to have blurbed one of the books on this shelf, I seemed to have lucked out by blurbing this one. The future certainly did not turn out exactly as Bridwell expected. But Chapter 8 is titled: “1980-1990: The Bull Market Decade.” And the final line of the book reads: “The time to buy and be fully invested in stocks is right now.” Better advice than most of the other books were giving in 1980.

I suppose books should be dusted after 18 years, but it was not something I was planning. I’m way behind on about a dozen different things. Dusting the books was not a priority. (I’m speaking quite literally here of dusting books, not “cooking” books or some other accounting esoterica.) But somehow, in a weak moment, I had agreed it was time to replace my put-’em-up-myself-on-brackets bookshelves with molding-adorned professional built-ins, not unlike the way Jerry agreed to wear the low-talker’s “puffy shirt” on the Today Show.

(Translation for the Seinfeld-deprived: She was a low-talker, so Jerry and Elaine couldn’t hear a word she said. Eventually, they gave up trying and just smiled and agreed at what they took to be the appropriate places. One of the things Jerry apparently agreed to, without knowing it, was to wear the puffy shirt. And may I say, to further confound those of you who have no idea what I’m talking about, or how Seinfeld could possibly command $1 million an episode, and the others $600,000 apiece: Hey! I think they’re worth every penny of it. Now just give the writers a raise.)

Anyway, getting built-in bookshelves meant taking down all the books from the old shelves and after a week or so, dusting them off and putting them back in the new shelves. Not a small job. But the side benefit, of course, is coming across so many long-forgotten pieces of one’s life.

One thing I came across was the little file box from the eighth grade in which I kept neatly typed three-by-five index cards for the book I was writing on Attila the Hun. (It’s pronounced AT-ill-ah, even though nobody does, and my book, aged twelve, began: “Like demons out of hell, they came …” speaking here of the Huns, who used to “cook” their meat by putting slabs of it between themselves and their horses’ backs and then galloping off to loot and pillage.) So there was this box, filled with alphabetical cards I had neatly typed 38 years earlier (“Acatziri, a tribe imperfectly subdued by Attila,” “Addac, king of the Alans in Lusitania (around Portugal). He died about 418, in battle against Wallia” . . . ). I have never hidden the fact I was a strange child. And as you can imagine, looking at it now for the first time in decades, I was struck by the passage of time and by the absurdity of my pursuit (no, I did not complete, let alone publish, my book on Attila — at 12, I didn’t even have an agent), but mainly, I was struck by the note I had apparently typed to myself, with some urgency. Indeed, it was the urgency rather than the note itself that struck me. It was the first card (alphabetical order be damned), and it was headed: IMPORTANT IMPORTANT, once in black with red underline, once in red with black underline:

SEE HODGKIN’S MAP, PAGE 568, VOL I., PART II. NOTE: THAT THEY USED A HIGHWAY ETC. !!!!!!!!!! NOTE WHICH ONE !!!!!!! NOTE WHERE IT LEADS !!!!!!!!!!!!!!!!!

Hodgkin’s was a wonderful 19th century three-volume history I had found at a rare bookstore. I seem to have deduced from one of its maps the route Attila would have taken on his way to or from some battle. And — lest I forget this world-shaking discovery (the Huns were thought to have come teeming down over the hills, I think, not to have taken highways) — I had pounded away on my old manual Olympia typewriter this card: IMPORTANT IMPORTANT.

Can you imagine if, at 12, I had put the same passion into learning about computers?

I had not planned to tell you any of this. I had planned to tell you about a few of the financial books I dusted off. Please come back Monday.

There are some things everyone knows, so no one explains them, and you somehow know you’d look stupid asking, so you never find out. This was the story of my sex life for a dozen years, but I write here of real estate closings.

Ninety-nine percent of you will just roll your eyes when you hear this, because of course you know it perfectly well. And the other 1% will pretend to be in that 99%. But I don’t care:

Do you know how much cash changes hands in an “all-cash” real estate deal?

None.

No suitcases full. No wads of hundreds. Well, maybe $5 for the notary public.

Cash is one of those words — like lash, rash, dash or bash — that has more than one meaning. To most people, it means actual currency. Dollar bills. Clinking coins. But in the financial world, it means “as opposed to debt.” An all-cash deal means you sold the building without having to “take back a mortgage” (i.e., you got the full selling price all at once at closing) and without even having to worry whether or not the purchaser can get financing.

“I’ll pay $150,000 — cash” means I’ll write you a check or send you a wire, unless you happen to run drugs for a living, or run a nightclub, or be the doorman at some swank hotel. The maitre d’ at one of Miami’s most famous restaurants bought a major condo, all cash. Every once in a while, “all cash” means all cash.

With respect to that $45 billion middle class “tax cut” I told you about a couple of weeks ago . . . it would come via reductions in the cost of your car insurance . . . I forgot to include what the New York Times editorial page had to say a few months ago:

“Trial lawyers contribute heavily to state and Federal politicians, largely because they want to block reforms that would eliminate excessive litigation that follows automobile accidents and other mishaps. For the most part they have succeeded, but their gain is the average driver’s loss. Americans pay punishingly high premiums, much of which land in lawyers’ bank accounts. Now, however, bipartisan proposals in Washington and New Jersey would give drivers, especially those who are poor, substantial relief . . . . The new proposals would give families the option of forgoing suits for non-monetary losses in exchange for quick and complete reimbursement for every blow to their pocketbooks. Everyone would win — except the lawyers.”

And remember, this is the New York Times, not exactly a right-wing outfit willing to trample the rights of the aggrieved or the poor.

Right now, you are forced to buy policies that pay insurance-company lawyers $150 an hour to fight your claim, and contingent-fee lawyers who take 40% of any money you do win. The Auto-Choice bill Senators Moynihan, Lieberman, McConnell and Gorton, among others, are pushing would allow you to opt out of this crazy system. Is your congressman on board? Or has he come to rely too heavily on trial-lawyer campaign contributions?

“Where can I find a company’s ex-dividend date? and pay date? Thanks.” — John Jessica

Check out www.stocksmart.com, which provides information about ALL upcoming dividends, splits, and distributions sorted by ex-dividend date or company for up to the next three months. Actually — check out this site anyway. It’s one of the best free sources of information I’ve seen.

And for those we’ve made curious: the ex-dividend date is the date on which buyers will no longer get the dividend that’s been declared. So it trades “ex-cluding” the dividend. The actual dividends themselves may not be mailed out for weeks — on the pay date (and you’ll still get yours even if you sold out in the meantime).

Usually it’s not very dramatic, in part because large dividends have gone out of fashion. If a company finds itself with an extra billion or two, it will not generally pay it out as a special dividend. It will generally use it to launch a disastrous acquisition campaign. Or it will build a luxurious new headquarters. Or, mostly these days, it will buy back shares of its own stock. That’s a better strategy than the first two, because it makes each remaining shareholder’s piece of the pie a little more valuable (the slices are slightly larger because the pie is divided into fewer of them) without having that extra value taxed (until you sell and take your profit).

But let’s say we’re the Ford board and we decide at our meeting June 15 to pay our regular 38-cent quarterly dividend plus “a special dividend” of an additional $1 a share. We decide it will be paid on August 15 to “shareholders of record” as of July 18. That means anyone buying the stock far enough in advance for the transaction to settle by July 18 (normally three business days in advance — which in this case would be July 15) will get the dividend. But anyone buying it too late for it to settle by July 18 won’t.

That’s why there will be a little “x” in the stock pages for a few days, to warn newspaper readers that the stock is trading “ex-dividend.” If you buy it “ex-dividend,” the trade will not settle in time for you to get this quarter’s dividend. The train has left the station.

Other things being equal, if Ford stock closed at 50 on July 15, it would open at 48-5/8 the next morning, because $1.38 in dividends has just been carved out of what you’re buying. If a share of Ford was worth $50 to you yesterday, then it should be worth $50 less the $1.38 dividend you’re not going to get if you buy today. Recognizing this, if Ford should close trading July 16 at the same $50 it did July 15, the computers and stock pages will not show it “unchanged,” as you might expect, but actually “up” $1-3/8 for the day.

But all of this is so out of fashion. Dividends? Who would want dividends? Isn’t it better just to buy stocks that go up 30% a year?

All week we’ve been following preparations for the hotel visit of a famous actress, her arrival, the days subsequent, including yesterday, when she had a problem with her fax.

It is almost time to leave — but not yet.

“More than 400 society and civic leaders attended a luncheon and fashion show at the hotel today,” reports my secret correspondent, the hotel manager. “Fortunately, while all of this was going on, Ms. Star behaved herself — until she flew into a rage over the fact that the operators couldn’t overcome the fact that she had somehow taken one of her phones off the hook, which prevented them from directing the calls to that line as she had instructed. Of course, she wouldn’t allow anyone to explain the situation to her (she chewed out — and hung up on — the operator who tried), nor would she allow anyone to enter her suite to put the phone back on the hook. I finally had to call her secretary and ask her to come back to the hotel (her staff and the rest of the cast are staying at a budget motel down the street) to remedy the situation.

“Spent the rest of the afternoon smoothing ruffled feathers in PBX and at the front desk — and assuring everyone that they wouldn’t be ‘written up’ for any alleged infractions of our standards even if Ms. Star complained about their performance during her brief tenure. (The staff is beginning to count the HOURS until her departure.)

“I finally left the hotel around 6:00 p.m., after she headed for the theater and I was confident she couldn’t inflict any more emotional damage. Took one of the hotel pagers home with me to ease everyone’s mind (only fair — after all, I got us into this starry mess).

“Kind people that they are, our staff feels sorry for her–they think she must be terribly unhappy to be so disagreeable all the time. Maybe they’re right.

“Yesterday, my counterpart at one of the hotels where Ms. Star will be staying next called. ‘Rumor has it that she’s a handful; how bad does it get?’ I told him what I’ve told you. ‘That’s what I was afraid of.’

“He said that they drew the line on moving furniture in the suite. ‘We have expensive stuff up there, and we’re tired of replacing it.’ In fact, when they reached this point in the negotiations, he tried to convince the travel agent to book her at another property. But the TA insisted.

“What prompted this hotelier to call me was that by the strangest coincidence, a meeting planner happened to have just come to his property from the hotel where Ms. Star was last in residence. This meeting planner told him that by accident the cell phone he had ordered through the hotel had been inadvertently given to Ms. Star and vice versa. Since the meeting planner’s number had been distributed to all of the attendees (and there were close to a 1,000 of them!), it was imperative that he and Ms. Star trade phones (if nothing else, to save her from hundreds of nuisance calls). The hotel, which had arranged the cell phone rentals for both, contacted Ms. Star and before they could explain the problem, she told them to ‘F— Off!’ and hung up. Somehow — at great expense — they were able to redirect the calls or advise all of the attendees of the situation. But everyone was shocked at her intransigence.

“I forgot to tell you that I wrote her a letter late yesterday afternoon and asked that it be given to her after she returned from the theater last night. I decided to apply some ‘reverse psychology’ and allow her to direct her anger at me. It may have worked: There was not one unkind word or irrational act from her today. Not a peep.”

And what was the text of this miraculous letter, I wondered?

Dear Ms. Star [he wrote]:

It is a great pleasure to have you at The ———-. Your visit continues a tradition of hosting Hollywood royalty that began at our historic hotel more than seventy years ago; and, as you might expect, we treasure it.

We understand how difficult it must be to find an acceptable home on the road, especially when your venue changes weekly and the demands on your time are extreme. No doubt it is doubly frustrating having to manage your domestic affairs through a revolving door of people and regional customs. Throw in the fact that perfection is a process (not fully achievable in a week, much less a few days), and disappointment is inevitable, as much as we wish this were not so.

More to the point, many of our staff come from the poorest sections of the city, and you can imagine the joy they derive from being able to please our distinguished guests with the services they provide. This is particularly true of stars of your caliber. From the doormen to the housekeepers, you could not find a more devoted following or one more intent on making you smile. A kind word is all they require.

As a gesture of goodwill and a first step in mending any misunderstanding, we would be very honored if you would accept the enclosed gifts. The first is a cookbook that contains a brief history of the hotel, with a mention of Maria Callas and her historic visit many years ago. The second is a commemorative box designed exclusively for us by Tiffany & Co. Only a few were made, and we wanted you to have one as a keepsake.

With kindest regards,

“At this point,” continues my friend, to me, “I think I went into the bathroom and washed my mouth out with soap–for all of the bad things I was THINKING about saying to her. I’m still blowing bubbles.”

Not long afterward, Ms. Star’s limited engagement ended and she went on to the next city, the next cowering hotel staff.

“She left around 6:30 a.m. Even though a bellman saw her leave, everyone harbored a doubt that she was REALLY gone. Since my associates know that I’ve faced everything from grizzly bears to bobcats, they left it to me to enter her suite and check it out. I knocked first, of course. But it wasn’t necessary; she was gone. Gone now, and probably gone forever. I was relieved to see that the suite didn’t suffer any permanent damage. She broke a lamp earlier in her stay, but considering what could have happened — and what stars have done to our suites in the past — we got off very, very lightly.”

SETTLING THE BILL

“This morning I learned that at the last moment, Ms. Star switched credit cards on us. She established her credit with the touring company’s card and, on departure, asked the front desk to bill it to her personal card. This usually poses no problem; but given the enormous sum involved, it required a little more than just the basics to obtain an authorization code from the credit card company — to wit, her home address. Oh, great.

“Fortunately, we were able to leave a message for her secretary. (Somehow we didn’t think Ms. Star would entertain this question.) The call was not returned for most of the day. Each time I passed the front desk I asked if we had heard from the secretary, and the answer was invariably ‘no.’

“It brought to mind the agony I went through a couple of years ago when I went out on a limb for a somewhat obscure governmental agency from Zambia (at least, I think it was Zambia). They brought in their minister of agriculture and an entourage intent on seeing everything — first-class. I think when they finally wiped the last crumbs of room service from their mouths, the bill topped $50,000. And I didn’t have a credit card to back it up. Or a check. Or U.S. dollars. Or Zambian dollars. Or ANYTHING. Just a promise to pay from a very diplomatic retainer in Washington, D.C., who waved away my doubts with, ‘Don’t worry, you’ll get paid. I PROMISE.’ O.K. Sure. No problem.

“Every night I went home and tried to forget what a dent $50,000 would make in my personal balance sheet. What would it be like sleeping out under the stars. One week, no check. Two weeks, no check. Three weeks, no check. By the fourth week I was checking flight schedules to Zambia (and inquiring about the financial soundness of the Zambian government). Finally, in desperation, I called the diplomat again and asked him — in the interest of Zambian-American relations (not to mention my sanity) — to make good on his promise . . . via FedEx. Please.

“Something in my voice must have struck a charitable chord because the next morning that beautiful FedEx packet arrived with a cashier’s check for $50,000.

“About 4:30 p.m. Ms. Star’s secretary returned our call and cheerfully gave us the address. All’s well that ends well.”

Each of the last three days we’ve been following preparations for the hotel visit of a famous actress, her arrival, and the days subsequent.

This saga won’t go on forever, but neither is it over . . .

“The staff has begun to refer to Ms. Star as ‘Mommie Dearest,’ after Joan Crawford, who used to stay at the hotel during her heyday, behaving in a similar fashion but adding her own signature quirks (sending ahead a 10-page list of instructions, cleaning her own bathroom on arrival, ordering vast quantities of vodka, requesting mountains of towels and NO WIRE HANGERS, etc.).

“Fortunately, our staff and Ms. Star have come to somewhat of an understanding. They accept her abuse cheerfully, but in pairs. No one has the courage now to enter her suite alone.

“For example, this afternoon Ms. Star was having trouble with her OWN PERSONAL fax machine (she brought her own; we just installed the line for it). She told the concierge to report to her room in ’30 seconds.’ On the way to her suite, he grabbed the front desk manager — who’s known for his equanimity in the face of the most outrageous guest behavior — and persuaded him to accompany him to the lioness’s hot, humid den. They knocked on her door, trying to look composed even as their hearts were pumping wildly. She took her time answering the door, then made them stay in the hallway until she had made one last attempt to fix the fax machine herself. Frustrated, she told them to come inside and work on it.

“It turned out that the fax machine was in perfect working order — it was just that she was not familiar with sending faxes long distance (something her secretary usually handles for her, I guess). After they explained the problem and showed her the procedure, she berated them for failing to post the directions on her OWN PERSONAL fax machine. As the concierge opened his mouth to protest, the front desk manager poked him in the ribs. He, then, turned to Ms. Star and said with one of his most endearing smiles, ‘You’re absolutely right, Miss ———–. We should have done just that.’ She dismissed them, and the front desk manager told me later, ‘I think she might have said “thank you,” but I wouldn’t swear to it.’

“She is a difficult woman. One of our front desk clerks worked elsewhere for a summer. Ms. Star made an appearance there and pulled some similar stunts, including timing the delivery of her 7:00 a.m. newspaper. Apparently, when the poor bellman assigned to deliver it arrived at 7:05, she grabbed the paper from him and slammed the door in his face. Later, she called the front desk manager and gave him hell. ‘I’m very busy, and I MUST have my paper RIGHT AT SEVEN.’ OK. OK.

“Fortunately, this is not an issue with us. She sleeps until 11 a.m., as I’ve mentioned, and then leaves at four for the theater. I’ve been offered tickets to the show, but I’m afraid she might stop in mid-performance and shout something obscene at me across the footlights (who KNOWS what I might be guilty of).

“Yet, aside from all this, I understand from ALL who’ve seen the show that she is ABSOLUTELY THE BEST. No one can touch her riveting performance. Her fans adore her.”

Tomorrow: The Curtain Falls

We have been spending the week spying on a famous movie star staying at a hotel a friend of mine runs. Click here to catch up with preparation for her visit or to review Day One.

And now . . . back to our story.

“You probably picked up on the fact that the Divine Ms. Star reserves her contempt largely for the hourly employees, most of whom — given their positions at the hotel — are unable to defend themselves against her wrath: the operators, the engineers (one of whom was cursed out royally for having the nerve to ask her directly where she wished to have her VCR installed), the front desk staff, etc. This creates a considerable challenge for our management: How to keep morale high when an abusive guest pushes it to a new low. (One of my managers was in my office early this morning saying, ‘Do you know she is addressing our employees with the F-word?’)

“Not surprisingly, we don’t have an exclusive on these hotel ‘horror’ stories. This morning I had breakfast with a friend who handles a hotel across the Atlantic. She said that Barbra Streisand was at that venerable hotel recently and demanded that the maid vacuum the carpet backward toward the door of her suite so that the maid’s footprints would not be seen marring its plush surface. Only Miss Streisand was to have the privilege of taking the first virgin steps onto the carpeting each day.

“Fortunately, we are finding now that Ms. Star follows a routine that keeps her in bed until 11:00 a.m. and out of the hotel by 4:00 p.m. By the time she returns after the show, she’s too drained to do anything but have her dinner and crawl into bed. (This morning when I stopped by the PBX, the operators were debating who would place her wake-up call. One brave soul volunteered and let go a chirpy ‘Good morning, Ms. Star. It’s 11:00 a.m. and 68 degrees outside.’ Her reflexes dulled by sleep, Ms. Star let the operator complete the sentence before hanging up on her.)

“The maids report that she has four or five humidifiers operating around-the-clock in her bedroom now (moisture is beginning to form on the ceiling); she has turned off the air conditioning completely (allowing the room temperature to climb to nearly 90 degrees — ‘Oh, Lordy, it was hot up there!’ said one of our heavyset maids with a hearty chuckle, ‘And her chef a heatin’ up the place with her cookin’); she sleeps with an electric blanket (when you can’t get warmth any other way, you have to buy it I guess); towels cover the marble bathroom floors as well as the vanity; and her son’s framed picture graces her desk. They have been shown what they can and cannot touch — and told how quickly they must work. (‘She’ll be back here in less than 30 minutes,’ the assistant road manager warned. ‘Hurry, and don’t bother to vacuum — you can do that later when she is at the theater!’)

“Incidentally, Maria, Ms. Star’s irrepressible Costa Rican chef, has learned that one of our night cleaners is also from Costa Rico. She is DESPERATE to meet him and has sought assurances from our housekeepers that introductions will be made forthwith.

“Finally, before signing off for now, and to be totally fair, I should tell you that Ms. Star received RAVE reviews for her opening night performance. What do we know?”

Tomorrow: To Reach the Impossible Star

Yesterday, my source revealed how his hotel prepares for a very special guest. Her list of personalized requirements way exceeded my own. (A remote control TV, a data port, and some towels.) Click here to review them.

The saga continues:

“Ms. Star’s secretary arrived around 11:30 a.m., and she quickly went to work rearranging the furniture in the suite. Ms. Star has claustrophobia, so the housekeeping staff had to move the desk near an expanse of windows (first, removing the dining room table and chairs and raising the chandelier a couple of notches). Then, two credenzas were added to this setup to form a U-shaped command post. We were told that the credenzas would be used to spread out files.

“The secretary explained that our staff should not greet her in any fashion (no ‘Good Mornings,’ no smiles, etc.). When screening calls, the operators are to be ‘New York abrupt’ (the secretary looked around and said ‘I hope none of you are from New York’): ‘Joe Blow calling.’ This is a little tricky to execute. But we’re going to give it a college try. (Imagine fielding thousands of calls each day and switching back and forth from being ‘abrupt’ to one person and ‘pleasant’ to everyone else. A screw-up is inevitable.)

“Ms. Star arrived around 9:30 p.m. Her car pulls up and our congenial doorman, who welcomes everyone with a million-dollar smile (and who, incidentally, is the only person aside from the General Manager who can afford to wear one of that magnitude), proceeds to open the car door for Ms. Star. As he begins to say ‘Welcome to the…,’ she snaps ‘shut the door!‘ The doorman quickly obliges and steps back, noticeably shaken, having never been addressed in that fashion.

“Several minutes later, the star emerges. Her face is now lit with a beautiful smile. She greets the doorman, who, baffled by the transformation, cautiously opens the hotel door for her. Inside, she smiles and waves at the startled front desk assistant manager. (He — like everyone else — has been told by her secretary that she will not acknowledge the staff AT ALL.) She smiles and waves at the bellmen. She smiles and waves at the concierge. Exit stage left.

“Later that evening … Ring. Ring. (We answer the phone within three rings; it’s a hotel standard.) ‘Engineering? I’m cold. But I don’t want you to do anything about it tonight.’ Click. Unbeknownst to Ms. Star, her personal staff has spent the day in the suite with all of the terrace doors open wide. (It was cold and breezy here yesterday.) Her staff, who supposedly knows her likes and dislikes, does not adjust the thermostat in the room and shifts the blame to the hotel.

“In the morning, I call her secretary who is carrying one of the five cell phones Ms. Star has rented for the visit. Me: ‘Good morning. We understand that Ms. Star was cold last night.’ She: ‘Yes, she’s always colder than the rest of us; and, besides that, she’s not feeling well.’ Me: ‘I see. When would you like an engineer to check the thermostat?’ She: ‘I’m on my way to the hotel right now. I’ll call you when I find out.’ Me: ‘Thank you very much.’ (She never calls. Presumably, she discovers that the thermostat is not an objet d’art; it controls the temperature in the suite.)

“Ring. Ring. The concierge lifts the receiver: ‘Ms. Star wants another VCR in her suite,’ says the secretary. ‘Right away,’ says the concierge. Two minutes later. Ring. Ring. The front desk clerk lifts the receiver: ‘Where is that VCR?’ screams the assistant road manager (who has also been assigned to place the same order). The front desk clerk calls to check on the status of the VCR. ‘The VCR is on its way.’ In ten minutes the VCR is in the suite, installed.

“Early afternoon… Ring. Ring. Operator: ‘Ms. Star, Mary Jones left a mess…’ Ms. Star: ‘I don’t know any Mary Jones.’ Click. Operator: ‘But…’

“Late afternoon… Ring. Ring. Ms. Star: ‘I want to talk to the front desk manager!’ Front Desk Manager: ‘This is Bill, how may I help you?’ Ms. Star: ‘My son tried to reach me and I never got the message. Make sure it doesn’t happen again. DO YOU UNDERSTAND? I DON’T WANT THIS TO HAPPEN AGAIN!’ Click.

“Front Desk Manager: ‘Operator, Ms. Star. said that she missed a call from her son. What happened?’ Operator: ‘Mary Jones called and left a message for her from her son. But before I could give her the message, Ms. Star hung up on me.’

“I call the secretary and explain the situation. Secretary: ‘Oh, her son is always pulling stuff like that.’ Me: ‘I see.’ She: ‘But, don’t let it bother you.’ Me: ‘We just want you to know that we are doing everything possible to follow your instructions.’ She: ‘I know. We deal with this every day. As her employees, we just shout back at her when she does this. Of course, I understand that you’re not in a position to do that.’ Me: ‘I’m afraid not.’ She: ‘If it makes you feel any better, she’s been yelling at all of us today. It started early this morning. Opening-night nerves, you understand.’ Me: ‘Of course.’

“Exit stage right. The star leaves for the theater in a mad rush, avoiding all eye contact. No smiles. No waves. No wire coat hangers.

“Some call it abuse; but in the hotel business, you might say we’re star struck. It gives the phrase a whole new meaning.”

Tomorrow: The Saga Continues