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"Mad Men's" Don Draper: His Lucky Strike Portfolio

|Includes: KODK, The Procter & Gamble Company (PG)

This article was originally published January 5, 2010 on thestreet.com


Call it "retro cool" or "Falcon Crest" meets "The Man in the Grey Flannel Suit," AMC's smash hit, "Mad Men," is the best thing to happen to television shows about the ad business since Darrin Stevens got promoted at McMahon and Tate. Set in the early 1960s during the golden age of American consumerism, "Mad Men" is an ingenious mix of tawdry soap opera and history lesson. In between smokes, martinis, and extramarital affairs, Don Draper, the show's protagonist/anti-hero and creative director of fictitious ad agency Sterling Cooper, guides his squad of copywriters and art directors as they conjure up campaigns for iconic American brands such as Lucky Strike, Clearasil, Kodak, and Gillette.

Being a man at the top of his game and on top of the world (young staffers are overheard gossiping about his salary: "I hear he makes 45 a year!") in a Madison Avenue corner office, how would Draper invest? Besides the $5,000 or so in cash he keeps locked in the desk drawer at home (Note to self: Do not leave keys to desk in bathrobe pocket), it would be safe to say he would own the shares of his firm's top flight clients. Smoke Luckies? Then they probably should be in your portfolio.

One of the Yieldpig staffers found an old monthly stock guide (prior to the Internet, investment houses would offer them as value added to their clients) from Steiner Rouse, one of many American brokerage firms that was eaten and digested by another firm long ago. The guide was dated January 1960. The data reflected pricing information at the end of December 1959. The third season of "Mad Men" is set in 1963. The first season is set in 1960 with episode No. 1 taking place in March of that year. With that in mind, we gingerly flipped through the yellowed pages of the guide in order to reconstruct Draper's account brand by brand. The equity weighting would probably be right at 50%.

Gillette, now a unit of Procter & Gamble (NYSE:PG) -- Sterling Cooper came up with an incredibly butch campaign for Right Guard because back then, men were men except for art director Sal Romano as we found out in season No. 3.

Maytag (MYG) -- Pitching appliances so America's housewives could live up to the Donna Reed standard.

Admiral - Draper's colleague, Roger Sterling, had the foresight to authorize Harry Crane, the agency's media buyer, to start a television department. Good thing since the firm helps Admiral hawk television sets.

American Tobacco -- Lucky Strike: the official cancer stick of Sterling Cooper. Smoke 'em if you got 'em.

Vick's -- Account man Pete Campbell, the office's resident weasel, reeled in Clearasil courtesy of his father-in-law. Just in time for Baby Boomers hitting puberty.

Eastman Kodak (EK) -- People could take brilliant color pictures and turn them into slides. Draper tugged at their heartstrings with a ride on their Carousel projector.

As far as the fixed income half of Draper's account is concerned, it would probably be Treasuries. He was a Korean War vet.

Since he's as sharp as the crease in his trousers, we'll assume Draper bought low (or had his broker do so, as the Internet wasn't even a science fiction movie dream yet) in equally weighted positions. The Dow Jones Industrial Average returned 15.6% that year.

Bonds, however, took it on the chin. A 10-year Treasury purchased at par and yielding 4.02% in January 1959 had given up 14.3% in principal value by December. Even with half of the portfolio giving up that much, including dividends (4.11% average yield) and interest, Draper's account turned in +35.75%! Maytag and Vicks were double baggers and a half while the poorest performer was Admiral, but still eking out a gain of 4%.

Congratulations, Mr. Draper. It was an outstanding year. Help yourself to a well deserved whisky on the rocks...and a secretary.
 



Disclosure: No Positions

Disclosure: No Positions