Knoxvillians ascribe stock market woes to variety of causes

By DAVID MOON, Moon Capital Management
December 10, 2000

Every week, I offer opinion and fact about the economy, financial markets and the various issues that affect them. The stock market is about to experience a calendar-year decline, many stocks are down 70 and 80 percent from last year, questions abound about the economy and the viability of our next national leader remains cloudy. How do these events affect the opinions and expectations of other Knoxvillians?

Dr. Fred Hurst, physician and author of a medical column in this paper, says he remains positive and optimistic about America and its citizens, but that the 'high times of the economy and markets of the past seven or eight years are simmering to a more reasonable, predictable and logical growth rate.'

Perhaps Dr. Hurst should talk to Ingram Group partner, George Korda, before placing so much confidence in Americans. While Korda wisely admonishes people not to invest in the stock market if they cannot handle the daily emotional roller-coaster ride, he notes that his own stock picking skills pale to his political prowess. 'I can single handedly kill any stock simply by buying it,' Korda confessed. 'Even when I think about a stock it sinks like a Florida voter's credibility.' George would not tell me what stocks he is thinking about these days.

John Ross, Dean of St. John's Cathedral, is concerned more with our fascination with stocks than the effect of a Dow decline. "We are wealthier than ever in the history of humanity, yet I see people worry more and enjoy their money less." Reverend George Doebler, director of Pastoral Care at UT Hospital, agrees. 'It has to do with a move to a more materialistic mode. 'What we have' appears to be more important than 'who we are.''

My brother-in-law, Brad Fultz, a drug rep for Elan Pharmaceutical, notes that many investors made big mistakes in the sector 'buying businesses that don't really do anything.' He also blames last week's decline in stock prices as the reason he has not yet paid the $100 he owes me for UT-Vandy football tickets. Come on stocks, I need you to recover.

Our computer guy, Byron Doss of MicroCerv, disagrees with Brad. 'Even the fledgling Internet commerce companies, the infamous 'dot.coms,' need very little capital. All they essentially need is some software and access to a web server,' he explains. Byron envisions a world where cable TV, telephone service, Internet access, video on demand and various other visual communications services will arrive in the home via a single wire. To him, the politics are irrelevant. 'I sincerely believe all of this will develop regardless of who is president.'

Defense attorney, Greg Isaacs, however, looks at the market through a political lens. He argues the irony of Republicans trying to blame Gore for the recent stock market decline, but refusing to give the Vice-President any credit for the prosperity of the last eight years. 'The free market should favor a proven track record over political rhetoric.'

Investment club member, Chelly Clayton, differs. 'Of course some recent negative earnings announcements hurt stock prices, but I believe the market is also down due to our presidential controversy. The market will quickly rebound when Bush is finally in office. That is, if Al Gore doesn't steal the presidency from the guy who already won.' I think we'll put her down as disagreeing with Isaacs.

Mayor Victor Ashe sees little negative local impact of recent stock price declines. 'Knoxville will continue to grow and prosper,' notes the mayor. 'Next year will continue to see great building activity in our area with the convention center, HOPE VI construction, empowerment zone activity and Coster Shop redevelopment. I think the future is very bright for our region.'

But the real impact of stock price declines is best summed up by my babysitter, Amanda Hudson, who also works at Sam's and is a Wal-Mart stock holder. Her fellow employees say that 'once we get a President, the stock will go back up. I would love it to go back up; that would be great.' Yes Amanda, that would be great.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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