All the News that Wasn't

By DAVID MOON, Moon Capital Management
January 1, 2006

All the News that Wasn't

Newspapers and magazines this time of the year are full of compilations of the top stories of the year, but seldom do I see a list of top non-stories. Here are a few of the events of last year that may have seemed like big, wide-scale business news, but they weren't.

' Katrina. As a natural disaster, Katrina has few peers, both in terms of lost lives and property. But the national financial calamities predicted as a result of the ensuing floods fall into the Chicken Little category. The primary resource needed to operate the port of New Orleans is water. Other than the port, New Orleans is a tourist town, no more important to our nation's economy than Las Vegas or the Great Smoky Mountains National Park.

' Privatized Social Security accounts. Does anyone remember this discussion? It sounded like big news at the time, but like most radical government transformation ideas seems to have died for lack of special interest.

' Oil prices. Any list of the towering business news stories of 2004 would have listed oil reaching more than $50 a barrel. Yet the economy yawned. A year later, we now look back at a 2005 in which oil topped $70 a barrel ' and the economy continued to chug along. Of course, some industries are affected much more than others by this type of raw-material price increase. But the price is increasing primarily as a result of increased worldwide demand. And an increase in demand has thus far been positive for most of the economic producers of the world.

' The Dow hits 11,000. Again. It's funny how some of the media makes an event out of numbers that end in zeros. The Dow Jones Industrial Average first crossed the 11,000 barrier in 1999. A few months later, it crossed the 11,000 mark again, this time on the way down. Interestingly, the Dow spent some time above 11,000 in 1999, 2000 and 2001. In none of the three subsequent years was the 11,000 barrier breached, at least not to the upside. On March 7, 2005, the Dow broke through 11,000 again to the upside, if only for a few minutes. But it's no bigger deal than Dow 10,900 or 11,100.

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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