Mom quieted down, not too graciously, and Dad then asked, "Anything particular in mind?"
I did have some thoughts, but simply said, "Not initially. Probably a general stock fund, perhaps something that mimics the Dow, or a money market account. Eventually, though, I see considerable opportunity in commodities."
That stumped him. Steiner broke in and asked, "Commodities? Like wheat or orange juice?"
"I was thinking more like oil."
"Oil!"
"You're crazy!", remarked Dad.
I grinned. "Crazy like a fox. You wanted to know what a mathematician can do? Here's an example of probability theory as applied to financial analysis."
"What in the world are you talking about?", asked my perplexed father.
The lawyer, however, said, "This I want to hear. He was right about the law suits, after all. Go on, Carl."
I smiled. "Okay, consider the following - the Arabs hate the Jews, right?"
"The Arabs and the Jews? What in God's name are you talking about?", thundered Dad.
I just held up my hand. "Bear with me. The Arabs hate the Israelis. That's a given. In the last twenty years they have fought three separate wars. The first was in 1948, the second was in 1956, the last one was last year."
"During which, the Israelis handed the Arabs their heads on a platter.", remarked Steiner.
"Indeed they did, but does anybody here think they have made up and are friends? Or do you agree that everybody hates each other's guts?"
"Agreed."
I continued. "Okay, so let's apply probability theory. From 1948 to 1956 is 8 years. From 1956 to 1967 is 11 years. The average separation between wars is 9.5 years. With me so far?" My father and Mr. Steiner nodded their heads. Mom was totally lost and stared at me in disbelief. "So, for simplicity sake, let's say they average 10 years apart. That would mean the odds of having a war in any given year are 10 percent. Once you have the likelihood of the war determined, it is possible to apply probability theory to subsequent actions."
"Keep going.", said the lawyer.
"If we assume a 10% chance of a war in any given year, then you have a 90% chance of avoiding a war in any given year. So, now, one year later, there was a 90% chance of not having a war in the Middle East."
"Which we didn't have.", said Dad.
"Right. So what are the odds of not having a war next year?"
"Like you said, 90%."
"And the year after that?", I pressed.
"90%, like you said. Why? You disagree?"
"Quite. The odds of avoiding war for two years in a row are 90% time 90%, or only 81%. The odds of avoiding war for three years in a row are .9 times .9 times .9, or roughly 73%. Four years works out to 64%, five years is under 60%, and at six years we are barely at a fifty-fifty chance of not having another war between Israel and its neighbors."
"So you're saying that by 1973 there is a fifty-fifty chance of a war starting between now and then.", asked Dad.
"Precisely."
"Okay, but so what? They hate each other. We already knew that!"
"Leaving aside other considerations, the Arabs are probably going to lose again, just like in every war they've had before. And, like in every other war, they will blame everybody but themselves - specifically the United States and Western Europe. The last time they had a war, they seized the Suez Canal, but now what can they do? What is the one thing that the Arabs have that everybody else wants and that they can take away from us?"
Suddenly a light went off in both Dad's and Mr. Steiner's heads! Almost as one, they both whispered, "Oil!"
"Precisely. What is going to happen the next time the Arabs get frisky and decide to take on Israel? We already know it is going to be sometime in the next five to ten years, and we already know the Israelis will clean their clocks. The one single thing the Arabs can do is shut the spigots off. The price of oil will go through the roof."
"So, we'll just pump more from here. There's still plenty of oil in Texas and Oklahoma.", countered Steiner.
"It doesn't work like that. Oil wells aren't like faucets you can turn on and off. Dad, you're an engineer, you know it's not that simple."
Dad looked at us thoughtfully and answered slowly. "Uh, this really isn't my specialty, but he's right. Besides, the reason we went to Arabia is because it's cheaper than drilling here. If we start drilling here again, the price is going to rise anyway."
"So, we stop burning oil in power plants and burn coal or something.", countered Steiner.
"You can't burn coal in an oil fired power plant. You'd have to spend a fortune and six months just refitting them. That much I do know.", replied Dad.
"And you can't burn coal in your car engine. What happens when gasoline that now costs 28¢ a gallon costs a buck or more?", I added.
"The government would never let that happen!"
"I don't know.", commented Dad. "This actually makes a lot of sense, in a crazy sort of way."
"All I'm saying is that if I put the money in the stock market rather than just a bank, I'll have a way to do better than whatever they pay on a passbook account. There are any number of events that can happen, any one of which can affect prices on stocks or bonds or commodities, but you can't do anything unless you are willing to play the game."
Dad eyed me. "Is that what you want to do? Become a stockbroker?"
I just laughed at that. What an impossibly boring job!
Mom decided to put her foot down. "You aren't actually going to allow this insane plan, are you? You want to gamble on wars and killing? Charlie, I absolutely forbid this!"
"Shirley, settle down." Dad faced me. "All right, I can see the idea of investing in the market, but you're only thirteen. You're too young to do that."
"So we put your name on the account. Not Mom's, she's obviously against the entire idea." Mom started squawking again when I said that, causing the three of us to wince. "I'll make the decisions. Is it my money or not?" Mom's squawking got even louder.
"Shirley, for the love of God, shut up!" Dad rarely, if ever, yelled at Mom, and the sheer shock of it made her speechless. "He's right. It's his money. I'll keep an eye on it."
I stuck my hand out. "Deal."
"Deal. But you better be right, or I'm going to have to bunk with you down at the poorhouse."
Mr. Steiner laughed at that and took his leave. "You really are amazing, Carl. Don't forget I want you in our Explorer Post next year."
"Yes, sir, I remember.", I replied, grinning.
Christmas was on a Wednesday this year, as was New Year's Day. School was shut down for a full two weeks, and I wondered about seeing a stockbroker during the off time, but Dad said no. It was the holiday season and a lot of people would be using up vacation days. Instead, the Monday I started back to school, he took off work early and picked me up after school. We drove directly over to his broker's office in Towson.
"What's your broker's name?", I asked.
"Bill Hardesty, but you call him Mr. Hardesty.", he answered.
"I'm about to hand him a check for $15,000. Maybe he'll let me call him Bill."
Dad snorted and said, "Don't push your luck."