IN financial myth, the stock market millionaire builds his fortune by a dizzying series of complicated speculations. In reality, the market often reserves its greatest gains for a tiny circle of people who do little if any discernible trading.
During 1972, at least four individuals and three families in the U.S. are known to have made on paper not just millions but tens or hundreds of millions of dollars in stock profits. Alas for the dreams of the average investor, all were rich to begin with, and their formula for multiplying wealth is, to say the least, difficult to follow. It consists of owning, and sitting on, a large block of stock in a major company that the investor or his family founded, and managing that company to eye-popping sales and profit growth. A rundown on the known big winners of 1972:
> David Packard picked exactly the right time financially to resign as Deputy Secretary of Defense in December 1971 and resume the chairmanship of Hewlett-Packard, the California electronics company that he and his Stanford classmate William Hewlett founded in a garage in 1939. During his three years in Washington, Packard had put his H-P stock in a trust, which gave to charity $23 million in dividends and capital appreciation. Last year the 60-year-old Packard got the full benefit of a rise in H-P stock from 48 to 87; the value of his holdings zoomed no less than $260 million, to a total of $581 million. President Hewlett, 59, did even better; his H-P stock rose $271 million, to $604 million. Packard, a highly able administrator, and Hewlett, a shirt-sleeved engineer, managed the company to a 61% profit gain in the last fiscal year; successful introduction of two advanced pocket calculators accounted for much of the increase.
> Anthony Rossi, 72, does not like to talk about his wealth because "you get all kinds of letters from people wanting money." His stock in Tropicana Products, Inc. of Bradenton, Fla., rose $59 million, to $128 million. Rossi, who still speaks in the accents of the Sicily that he left 51 years ago, founded the company in 1946 after a varied career as cab driver, bricklayer, tomato farmer and restaurateur, and he owns 24% of Tropicana's shares. He was one of the first to discover the North's thirst for chilled orange juice shipped from Florida, and has kept the company growing by innovations that have cut the cost of packaging and shipping the juice. In its most recent fiscal year it raised sales 22%, to $105 million, and increased profits by 29%, to $8.8 million.
> Abe Plough, 81, made $39 million on paper last year; his 3% stock ownership in the drugmaking Schering-Plough Corp. rose to a year-end total of $105 million. Plough started in business at the age of 16 by borrowing $125 from his father in order to sell "Plough Antiseptic Healing Oil" door-to-door from a wagon in Memphis; 65 years and 29 acquisitions later, he has built a worldwide company that he still actively manages as chairman. Plough's record of fast earnings growth—from $1.43 a share in 1968 to an estimated $2.90 last year—has caught the eye of investment analysts, who are recommending the stock to mutual funds. Last year buying by these institutions helped push the price from 86 to 137.