INVESTMENT ADVISORS at WVRC,
ERIC LOBERG led the Pledge – but
not until he had complained piteously about the lack of enough reminders
that today was his day. We moved on to the song, You’re a Grand Old
Flag, led by LENNY FRIEDMAN with PP JIM DOWNIE on the keyboard. PDG
BILL GOODWYN gave the Invocation, first allowing us to sit down. It
seems there was a burglar in the kitchen, and the lady of the house
confronted him, holding up her hand and quoting Acts 2, 38. This caused
him to freeze in his tracks, so she called the police. When they
arrived, they asked how she was able to detain the burglar when she had
no weapon. The burglar answered, “I thought she had an ax and two
We had several spouses present,
and they were asked to stand. FLOYD DEWHIRST then noted our three
visiting Rotarians – Hal Quigley, Assistant Governor, from the Santa
Monica Club, who is a business consultant, Virgil Vochoska, from
Anchorage, Alaska – a senior active who was in the State Judiciary – and
he brought along his son, Bill, plus Kev Coughlan, from the Mt. Granite
Club in Australia. Actually LEO TSENG introduced Kev, since they have
known each other for over twenty years – Kev still sends birthday
greetings to LEO after all these years! And on this general subject,
two of the above noted they were senior active – a category which no
longer exists in Rotary (which I’m sure you needed to know, right?)
Since today is the Chinese New
Year Day, Pres. PETER presented each of us with a bright red envelope,
with his name (in Chinese) embossed, and inside were two gold plated
chocolates. Delicious! PETER also gave us a bit of background
information, pointing out that he was educated by Catholic Irish
Brothers while growing up in Hong Kong. He recalls this tidbit from
those days, “Only Irish coffee provides in a single glass all four
essential food groups: alcohol, caffeine, sugar and fat”.
A couple of general announcements,
if I may:
Note the date of Feb. 7th
– Sweetheart Brunch at Shanghai Reds in the Marina. Send in your checks
right away, please. We are still collecting used cell phones –
turn them in to Ernie (but remember to BRING them next week, OK?)
The Pacific Palisades Club is
changing their meeting place and time – Henceforth, Mort’s Oak Room on
Swathmore and 0715 is the starting time. And last, but not least,
we NEED your input on former members or friends who should be invited to
our 75th Anniversary. Please give them to Ernie – right
away, if you will.
Note the list we already have is
on our Website – but please help!
KACY ROZELLE came forward with his
craft talk – after almost three years as a member! Since he figured we
already knew about his personal life, (born in New Jersey, bachelors
degree from Viginia, and MBA from Texas, arrived in California in 1989 –
his wife is Marsha, three small kids) he concentrated on presenting St.
Cloud Capital via large screen video format. Three years ago, after
extensive experience in Investment Banking, he and three associates
formed St. Cloud Capital, which is a Small Business Investment Company.
St. Cloud raises private capital,
plus it is able to borrow large amounts of government money, which they
invest in small and medium sized companies. They seek established
businesses with solid management, proven products and strong growth
potential. Since these are almost always new entities, they lack the
track record which would allow them to borrow from regular banking
sources. All Small Business Investment Companies are restricted to
investing in entities with a net worth of less than $18 million, and
average net income of no more than $6 million. And when KACY noted that
they are prohibited from investing in gambling or pornography, there was
a visible sigh of regret from the audience…
Two recent companies in which they
have invested are Sweet Candy, LLC and Advanced H20, Inc – their total
investment in the two is $3.875 million. Previously, they invested $2
million in Concepts Direct, Inc, and their note and stock were
subsequently sold to the Chairman and CEO of Concepts. They invested
$1.5 million in Computer Motion, Inc, and this investment has been
exchanged for shares of intuitive Surgical stock. It all sounds good to
me, and we are glad to have a handle on what KACY does.
PP STEVE SCHERER began the
Investment Advisors Program with some general comments. First, he noted
that 2003 was the first up-year in the market since 1999.
Our economic recovery has been
fueled by the lowest interest rates in recent memory, with the DOW
closing at 10,453, after a 16 month rebound. (The high in Jan 2000 was
11,722, while NASDAQ’s high was 5048, closing 2003 at 2053) The
revelations about corporate corruption didn’t seem to bother investors.
For the year, the DOW was up 28.8,
the S&P up 28.69, and NASDAQ almost 50 percent.
The WVRC members predictions for
2003 were that the DOW and S&P would go up in the range of 5 to 10% -
specifically, 8871 for the DOW, S&P 922, and NASDAQ 1368. The only
right prediction was long term Treasuries! So for 2004, these same
three were confidently expected to go up from 10 to 15% (this by
The first Advisor to take the
stand was LEO TSENG. He commented that it took a certain amount of
personal courage to appear once again before the assembled WVRC, and
complimented our newest Advisor, SHANE WAARBROEK, on being willing to
sit in the present company of WVRC advisors. LEO believes in the
scientific approach, having relied in the past on throwing darts and
talking to his barber for tips. He hadn’t called Martha Stewart, he
said. Somehow, this led to the story of his fortune teller in
Chinatown, whose name was, alternatively, Long or Wong, and this made
taking his advice somewhat more risky. But to be more specific, LEO
predicts the DOW going up to a range of 11450-11975, S&P to 1250, and
the 10 year rate @ 4.25%. He expects the multi-national companies to be
the main beneficiaries, naming IBM and GE specifically.
DONN CONNOR came forward, noting
this was the Year of the Monkey, plus nothing bad usually happens in an
election year. He expects the economy to grow 4%, the DOW and S&P to
grow between 13 and 14%, while NASDAQ will not be as strong, going up
maybe 10%. He likes Time Warner as an investment.
DICK ROBINSON considers himself to
be the conservative among our advisors. He thinks the U.S. is strongest
in heavy construction and farming equipment, where orders are up from 15
to 30%. Consequently he recommends Deere as the best of this group.
DICK expects the DOW to go to
10,900, S&P 1200, NASDAQ 2100, and 4.5% for the ten year treasuries.
SHANE WAARBROEK began by remarking
that he was glad it was this year, and not last, that he was talking
about. He feels that there are a number of factors that will influence
the market this year, noting elections, favorable tax treatment, the
fall of the dollar, and the mounting deficit. He expects all three
indexes to go up between 10 and 15%. His stock recommendation is Zimmer
Holdings, a diversified company which is active worldwide.
LEE DUNAYER was down with a
serious cold, but gave his thoughts to STEVE to pass along. LEE expects
the DOW to finish at 12000, NASDAQ at 2200, the S&P at 1270, and the ten
year treasuries to 5.05%. He recommends Three M as a good investment.
PP STEVE SCHERER was up last. His
numbers are the DOW at 12000, NASDAQ at 2350, S&P at 1250 and the ten
year treasuries at 4.95%. His stock recommendation is Medtronic.
So, there you have it. We’ll get
another recap starting in 2005 – stay tuned!
YOE, Ernie Wolfe