"Our conclusion was that we didn't know exactly what was going on, but we didn't sense that the world was coming to an end," says Bob Kampmeinert, chairman and CEO of Parker/Hunter Inc., the 101-year-old investments and investment banking firm.
Instead, Parker/Hunter advised its clients to look at the glass as half full, not half empty.
"We counseled our clients to not panic, to view this as an opportunity to buy good stocks at unbelievably good prices," Kampmeinert says.
Clients heeded that advice, buying as much as a dozen times more in stocks as they sold on the day of the crash and over the following weeks. By the time the dust settled, Parker/Hunter had been vindicated. The Dow bounced back and gained, within a few days, more than half the loss from the crash. And by September 1989, it had recovered all it had given up on Black Monday.
"With the benefit of hindsight, we were right," says Kampmeinert.
It takes more than clear hindsight to navigate the complexities and vagaries of investing, given different kinds of investors and varying market conditions. For Parker/Hunter, the overriding smart strategy might be described as focusing on each client's needs, gathering information to ensure solid investment decisions and not overreacting to the fickle nature of the financial markets, which often is revealed by events like Black Monday or the technology bubble.
Still, keeping clients trained on picking good stocks and holding on to them for the long term has not been an easy task, given the market's sluggishness over the past three years.
"It's been a challenging time to keep people focused," Kampmeinert says.
Parker/Hunter traces its roots to two Pittsburgh companies, Kay, Richards & Co., a stock brokerage founded in 1902, and McKelvy & Co., an investment adviser. The two merged in 1969 to form Parker/Hunter.
Today, the company employs 310 people, 175 of them investment professionals, serving 40,000 clients in 21 offices in Pennsylvania, Ohio and West Virginia. Many of those offices are in small towns or suburbs of Pittsburgh, where the company has built a book of business out of referrals.
Parker/Hunter operates the largest investment research operation in Pittsburgh, with seven analysts researching and reporting on 90 companies and offering commentary on about 70 others. A comprehensive research department, says Kampmeinert, offers the firm's investment advisers information to help guide clients with their investment decisions.
To supplement resources for its clients, the firm also purchases research on other companies from Credit Suisse First Boston. To provide investors with more market intelligence, Parker/Hunter is planning to expand its analyst coverage to include additional regional companies.
"The last place"
Like a lot of transplants to Pittsburgh, Kampmeinert wouldn't have picked this as the city where he would spend most of his professional life.
"It's the last place I thought I'd end up," he says.
"It's definitely the last place my wife thought she'd end up," he adds.
If moving to Pittsburgh to build his career in financial services came as something of a surprise to New Jersey native Kampmeinert, his decision to follow a trail that led to working in the investment world was hardly an accident. His father was a financial officer at a large New York firm, and he says he himself had always harbored an interest in the stock market.
When it came time for college, Kampmeinert enrolled as an economics major at Lehigh University.
His path to Pittsburgh can be traced to his college days. While still an undergrad at Lehigh in the early 1960s, Kampmeinert and some of his fraternity buddies began to buy and sell stocks. In the process, they discovered they had a knack for trading.
When he finished his graduate work at Harvard, he went to work in 1968 for Kidder, Peabody & Co. in New York as an investment banker.
Some of his fraternity brothers, the same ones with whom he had dabbled in the stock market, landed at Parker/Hunter. The firm was seeking to leverage its research assets to launch an investment banking department, and one of Kampmeinert's chums at Parker/Hunter spent a couple of years trying to coax him to come to Pittsburgh to head the effort.
Although far from the go-go pace of the New York financial scene, Kampmeinert found Pittsburgh to be remarkably similar to what he experienced at Kidder, Peabody.
"I found Pittsburgh, culturally and people-wise, very much like Kidder; good people, honest, ethical, client-oriented, but I also felt Western Pennsylvania had a wealth of opportunity in terms of small and mid-sized companies," says Kampmeinert.
His instincts were correct. Parker/Hunter, in the years since Kampmeinert joined the firm, has led a number of successful initial public offerings for Pittsburgh companies that include medical device companies Respironics and Medrad; Tollgrade Communications, provider of hardware and software testing solutions to the telecommunications industry; and Matthews International, producer of memorial products and caskets for the funeral industry.
Parker/Hunter has an interest in expanding its reach across the state, but there are no immediate plans to move into new markets.
"We've got so much opportunity within the footprint that we've got right now," Kampmeinert says.
The firm relies heavily on referrals from current clients, so moving into new cities requires careful planning and consideration.
Kampmeinert says Parker/Hunter would ultimately like to have a presence in Erie and Harrisburg.
"I'm not sure the way we approach clients and the way we work with clients and do what we do is highly scalable, that you can just roll this out cookie cutter," he says.
"So much of our business comes via referral, particularly on the retail side, so it's difficult to start up in a new community where you don't have people as part of the community happy to refer to you," says Jay Yard, Parker/Hunter's senior vice president of marketing.
And in a vein that seems much like the advice Parker/Hunter might offer to its own clients, Kampmeinert describes his approach to the firm's expansion like this: "You don't want growth just for growth's sake, you want to do it right." How to reach: Parker/Hunter Inc., www.parkerhunter.com