In Focus

Schwab-ing It In My Dreams

NOTE: For the month of July, we decided to feature publicly traded companies from the states in which a few of the Chicks in our club roost. Following Georgia, Ohio and Minnesota, it's now time to spend a week out west! Welcome to California, featuring many a company on the Forbes 500 list. Grab your sunscreen and shades, lay back on your beach towel and get ready to learn a bit more about Intel, Hewlett-Packard, PacifiCare Health Systems, Charles Schwab, Walt Disney and Apple Computer.

Last night I went to bed dreaming of Charles Schwab. How sick is that? I used to dream about Brad Pitt, Tom Cruise, and sometimes even my husband, but last night, it was the elderly Mr. Schwab. What has happened to me? Have I gotten so caught up in the financial industry that I read my People magazine after I scour the business section of the paper? Have I forgotten that Russell Crowe is single and would love to hear that women everywhere are dreaming about him? What is it about a married Chuck that had me smiling as my head hit the pillow?

Let me preface the dream.

All day yesterday I was researching The Charles Schwab Corporation (NYSE: SCH). It was my assignment for this week of focusing on California companies. What I found out is that Charles and I actually have a lot in common. We both wrote books that have been published by Crown Business. His is called You're Fifty-Now What? And mine is Chicks Laying Nest Eggs. His book is about investing, so is mine. He is married. So am I. He went to college (Stanford), so did I (SUNY Buffalo). Ummmmmm. he has kids (5); I do too (4). He lives in the San Francisco area, and I just visited there. Are you seeing the similarities?

Okay, maybe I was dreaming about him because opposites attract. He's old, I'm so far from. He's a man, I'm from Venus. He finished graduate school, I quit. His business is worth $806 billion in assets, and this website has none. That little piggy went to market, and this little Chicky stayed home.

Here was the dream.

It was 1970 and Chuck and I decided to head to California. He was driving our fixed up Love Bus, a Volkswagen with fluorescent flowers painted on it. I was braiding my hair while singing the Partridge Family's "I Think I Love You," when Chuck said to me, "Honey, we should really start a brokerage company. I think we should create a business that will put the customer's needs first. You and I can start the first 'do-it-yourself' brokerage. We will follow the lead of the customer and see where it takes us. It's a new kind of freedom. Peace for investors. Let your hair down, Flower, let's live on the edge and do it!" So we did.

Over the next several years, our business became the most popular place for individual investors. We offered a discount brokerage for investors to manage their assets, make decisions and transactions without the high-pressure sales person influencing the client. Lord knows we were in an era when everyone thought they knew everything, and had not a care if they didn't. Our business at Schwab offered them a place to have freedom of investment choice. (I do remember being a bit irritated that I allowed him to name the company after him, when I thought "Peace, Love and Invest" was a much better name.)

In the eighties Chuck and I threw in our caftans and decided to get a bit serious. We sold the Love Bus, and bought a Grand Prix. We decided to expand into the mutual fund industry as it was growing faster than John Travolta's popularity. We created a supermarket of sorts for our customers to buy one of hundreds of mutual funds. We called it the Schwab Mutual Fund MarketPlace®. Again, this was Chuck's idea. I was rallying behind the name "Village People Place," but he would have no part of it. Again, I felt a little irritated. Matter of fact, I was so irritated that I called up the Bank of America and sold the company to them. Yep, I sold Chuck's baby right out from under him. I thought, "I'll show him. For years I've been the submissive Flower Child. I'll take his pride and joy and sell it. I'll show him that I have a voice." I then fled California and went to live in a trailer in Northern Minnesota.

With search warrants galore out for me, Chuck ended up buying the whole company back. Then he took it public. Two months later, the stock market crashed, one of the worst drops of the century. I promise I had nothing to do with it, but I'm sure they could hear my laughter all the way to the Pacific.

Chuck eventually found me. We reconciled and held a lavish wedding like Celine Dion's. I even got to wear a tiara. Celine was unable to attend as she was going through fertilization treatments for the eighth time but sang, "My Heart Will Go On" and "Love Can Move Mountains" to us via the internet... as it was now the 90's. At this moment Chuck and I realized the potential of the internet and invested heavily into being an online discount broker. We were the first to get there and soon became the leader. During this time we received many many awards: Fortune Magazine's #5 Best Company To Work For, Fortune Magazine's #16 Most Admired Company, Worth Magazine's Best Online Broker, Working Women Magazine's #2 Company for Executive Women. and the list goes on.

Then the dream took a sudden turn. It was 2001, the week of July 16th. Our earnings were released. After years and years, and quarter after quarter of increased revenues, ours had fallen. It was the third quarter in a row that our sales slacked. I promised Chuck I wasn't sabotaging the company at all from the outside. (We have been in counseling for the past couple of years, as he still hasn't gotten over the Bank of America thing. Trust has been a big issue between my little bug and myself.) After an unbelievable run the past ten years, our stock suddenly fell 50%. Everything we had worked so hard for, cut in half in a day.

I woke up in a sweat. This wasn't a dream. It was all true. It was the research I had read the day before replaying itself in my subconscious. Okay, okay, the part about me braiding my hair and the Partridge Family is an exaggeration. But the rest of the details of Schwab history... all true.

What does my dream tell me? (I've read more dream books than I care to admit.) It tells me that Schwab and company will bounce back. He always does. He's always one step ahead of the game. He's no fly-by-night hippie. He's a smart businessman whose company just happens to be a victim of economic times. It's happened to him before, and it'll happen again. He has a passion for his business and it will always come first.

Chuckie's in love. and not with me.

Go see the latest Schwab Income Statement and Balance Sheet for a real life account of the financial situation. My dreams couldn't do it justice.