Tuesday, March 21, 2017

Did a Stock Slump Radicalize Steve Bannon?

Marty Bannon, Steve Bannon’s father, worked fifty years for AT&T, rising from lineman to middle management. Whenever possible he bought AT&T shares, his only investment. When Marty retired, the AT&T represented his retirement fund and, in his eyes, the family fortune.

Then came the Great Recession. In October, 2008, Marty panicked. Apparently fearing AT&T would go to zero, he sold for over $100,000 less than he had paid.

Steve Bannon has enjoyed a more varied career: Goldman Sachs banker, documentary film maker, and now chief strategist in the Trump White House. But his life’s pivotal point, according to The Wall Street Journal, was the loss his father took on that nest egg.
There were many factors that turned Steve Bannon into a divisive political firebrand. But his decision to embrace “economic nationalism” and vehemently oppose the forces and institutions of globalization, he says, stems from his upbringing, his relationship with his father and the meaning those AT&T shares held for the family. 
“Everything since then has come from there,” he says. “All of it.”
Why was Marty able to ride out AT&T's staggering 2000-2001 price drop but not the lesser decline in 2008? A “sell” from TV’s Jim Cramer may have triggered his panic attack.

Was "Wall Street" really to blame for allowing Marty to buy high, sell low? Not entirely, and not enough to cause Steve Bannon to go radical, in the view of The New Yorker's Nicholas Lemann.

Bottom line: Retirees like Marty Bannon shouldn’t obsess with market swings. They’re income investors. And incomewise, AT&T investors have little to complain about.

In 2008 AT&T paid $0.40 quarterly, up from $0.355 the year before. Since then, the quarterly dividend has increased by a penny every year: $0.41 in 2009, $0.42 in 2010, and so on. The 2017 quarterly dividend is $0.49.

If Marty Bannon still had his shares, his investment income would have grown by more than 20 percent since 2007.

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