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A day in the life of an investor, and what a day
A reporter sits down with a local investor to discuss his thoughts on what will happen with the market in the days and months to come.
By Ken Gale /Special to The Malibu Times
While some have urged investors to buy stocks to bolster the market as the patriotic thing to do, Malibu investor Richard Carrigan takes a contrary point of view.
“There were some individuals that said, ‘We’ll be patriotic and buy stocks.’ And what I say to that is, be patriotic but this is not a time to wear your heart on your sleeve. This is a time for investment discipline. You’ve got to invest intelligently. Intelligent investing is the best thing that can happen to the marketplace. You can’t argue with the wisdom of the marketplace. It keeps its own counsel.”
Carrigan has been a professional stock market investor for many years, and ever since he moved to Malibu 14 years ago he has had only one client — himself. The advice he gives is the advice he follows himself.
On Monday afternoon, following the first full day of trading after the stock market’s historic six-day shutdown, Carrigan talked about what it was like. And he offered a professional’s insight into how the market works and what it may do in the weeks and months to come.
“First of all,” he said, “America should be so proud of the way the markets operated today. It was incredible … a testament to the depth of our market place.”
But it was still a daunting challenge for the investor.
“I said to myself, the one thing the market hates is uncertainty and we have so many uncertainties out there.”
He studied “evaluations,” looking for good price-earnings ratios — the measure of a company’s earning power — as well as good management, a good balance sheet and good discipline. “The same yardsticks of investing still apply.”
His analysis: Despite falling prices over an 18-month bear market, stocks are still overpriced. “All bear markets end when evaluations become attractive. And I don’t think they’re attractive yet.”
His strategy: Be very conservative. Carrigan hedges his bets with a very complex and sophisticated strategy, not for the amateur investor. In essence, for every $100 of equity stock he purchased, he put another $80 into investment products such as puts, calls and futures that make money when the market goes down. That’s the hedge. It meant he now had only a 20 percent exposure to the equities market, down from his 32 percent position before the terrorist attacks last week.
“In other words, I was selling,” he said.
Carrigan believes the economy is in a recession. And while he hasn’t seen any panic selling yet, ever the contrarian, he believes that is exactly what must happen to stop the bear market and begin economic recovery.
“What I think will end the bear market will be the ultimate act of capitulation on the part of the public, where there is panic selling. And I think that panic selling will begin on a big volume at sometime between 900 and 950 on the S&P (Standard & Poors market index) sometime in the first quarter of next year.” (The S&P closed at 1038 Monday.)
Things to watch out for: A decline in consumer spending, especially at Christmas time, and a decline in the housing market. He cited a recent Forbes Magazine article that warned there are “ominous signs” that a housing crash is about to happen. Here in Southern California, the Los Angeles Times has reported that brokers and analysts are “cautiously optimistic” the housing market will hold, although there was a 20 percent slump in sales of million-dollar homes this summer that some are worried may spread to the rest of the housing market.
Carrigan’s advice for now: “I think this is a time to be conservative. I would say, no more than 20 percent of your portfolio invested, have 80 percent in cash. And I would say you should be patient and you should study.”
In defense of a fellow citizen
It is a shame (and astonishing!) that you, as editor of The Malibu Times, continue to sanction such outrageous mudslinging on your “editorial” pages. Last week was the last straw. If only I had a subscription that could be canceled. But alas, another angry Letter to the Editor is my only feeble recourse.
It’s one thing to debate the merits of November’s land acquisition bond-it’s another thing to feature personal invective against people who work hard (and volunteer!) to promote solid family values in our community. Deirdre Roney is an outspoken individual with a passion for public service. The Malibu Times itself, bestowed her with its coveted Dolphin Award last year for her immense commitment of time and service to the children of Malibu. Whether you like her or not, whether you are for the bond or against it, to permit such vicious personal attacks on fellow citizens sets a poor example for our young people, encourages a tragically low standard for the quality of debate on all issues and diminishes the value of the so-called “free” press.
I often feel lucky that I live outside the city limits and can turn off the noisy din of Malibu’s strident political battles, but when upstanding people are dragged through the mud because their opponents refuse to make good arguments for their side and instead attack the people who advocate for whatever cause or idea; we, the readers, must respond and voice our disapproval.
Heather Anderson
Topanga resident dies in WTC plane crash
Friends and co-workers remember a man whose big heart and smile brought warmth to everyone he knew.
By Suzanne Marcus Fletcher/Special to The Malibu Times
Last week’s attack hit Americans where they live. On every level. The days following have been no less cruel, as compelling stories of the victims come to light in the aftermath of the most pivotal acts of terror on U.S. soil.
Topanga Canyon resident Thomas Pecorelli, 30, was among American Airlines’ ill-fated passengers who departed Boston on Flight 11 bound for Los Angeles, which crashed into the World Trade Center’s North Tower at 8:45 a.m. on Sept. 11.
Through close friends and colleagues, a portrait of Pecorelli emerges, revealing a warm-hearted man described as “extraordinarily talented,” “hysterically funny,” “a renaissance man with a beautiful voice” who, among many performance talents, was said to do a mean Frank Sinatra imitation.
David Kister, a close friend of Pecorelli’s and colleague at Fox Sports Net, said Pecorelli was, by trade, a highly respected cameraman for E! Entertainment Television and Fox Sports Net Los Angeles. The sports network hired Pecorelli for its launch in 1996 where he soon met Kister.
Pecorelli was anxious to return to Los Angeles on the morning of Sept. 11, said Kister, to see his pregnant wife, Kia Pavloff, and was scheduled to work at Fox that afternoon.
“I was watching television with my wife. That’s when it hit me in the face,” said Kister. “[The airline’s] first call was to say that [Pecorelli] had checked in – but not that he was a confirmed passenger. We had to wait 12 hours. He was the type of person who wanted to see his wife. We knew he had made the flight.”
In a tearful conversation, David Kister’s wife, Michelle Kister, said Pecorelli was the kind of person “who always had the crew and talent smiling and laughing,” noting that his big heart extended especially to children. “Tom was just elated about being a father,” she said. “He loved his wife more than anything.”
Pecorelli, a native of the Boston area who attended the University of Massachusetts at Amherst, was reportedly on the East Coast to attend a friend’s wedding and visit his father who has heart trouble.
Jules Asner, an E! Entertainment anchor and host who worked with Pecorelli, said she often traveled to Boston. “I’ve been on that flight many times,” she said ruefully, adding that she and Pecorelli shared a common interest-the Red Sox. “He was a big Boston Red Sox fan,” said Asner. “We would commiserate. He was such a nice guy.”
Pecorelli worked on several shows for E! including “Talk Soup,” where he was featured in several of the shows’ sketches. But, said Asner, “He preferred to be a cameraman.”
“When we went to do the newscast [last] Wednesday,” Asner continued, “I realized this is where I see Tom, and I just lost it.”
E! studio director Cynthia Zoller Malone knew Pecorelli well, and said he began freelancing with the network about three years ago.
“He gave me a lot of comfort,” said Malone. “[I] was just happy to see that Tom was here – he brought the whole attitude of the room up.”
Malone said Pecorelli was scheduled to work with E! on its live Emmy Awards coverage last weekend. “He had a great sense of humor – a very funny guy,” said Malone, echoing a similar comment by all those interviewed.
“He was very ambitious,” continued Malone, whose voice softened upon saying that the last time she saw Pecorelli, “He told me that he and his wife were expecting. I gave him a big hug, and he proudly showed me [the] ultrasound.”
Kister said Pecorelli chose to live in Topanga Canyon, “because it was the only place in L.A. that he liked. [He and his wife] enjoyed the community, the people, hiking and the beauty of the place.”
Kister said keeping focused on work has been a saving grace in light of the tragedy that took his friend’s life. He is busy working with Fox Sports Net executives, anchors and other talent in obtaining memorabilia donations from sports teams, which will be auctioned on the Fox Sports’ Web site. The proceeds will go to the Tom Pecorelli Memorial Fund.
“We want to make sure that Kia and the baby are being taken care of,” said Kister. “sWe wanted to do something to get people involved, and feel like they’re helping.” Approximately 16 teams have already donated memorabilia, said Kister.
Reflecting a few days after the crash, Kister sighs heavily, while remembering his friend who “did a phenomenal Jimmy Buffet Margaritaville.”
“In death, everyone becomes the greatest person in the world,” said Kister. “But Tom really was the greatest person in the world.”
Those who wish to learn more about supporting the Pecorelli Memorial Fund, can do so at Topangaonline.com.
Carrying the ball
A mother believes her son, who lost her son to sudden cardiac death, wanted her to help others. “In a way, he left me to carry the ball for him.”
By Nikki Pedersen/Special to The Malibu Times
He was young. He was healthy. He had a full, promising life ahead of him.
Then suddenly, he was gone.
In the wake of her son Chad’s sudden death during a football game, Arista was shocked to find out he was the victim of hypertrophic cardiomyopathy (HCM), a “silent killer” characterized by abnormal thickening of the left ventricular wall of the heart, known to be one cause of sudden cardiac death in young athletes.
Chad Butrum was just 26.His heart, which had become enlarged by disease, couldn’t handle the stress of physical activity.
Out of his death was born the Chad Foundation for Athletes and Artists, a nonprofit organization to honor the former Malibu athlete and help prevent the estimated 3,000 victims of sudden cardiac arrest who are between the ages of 15 and 34 and die suddenly on athletic fields each year.
On Sept. 30, the 7th Annual Chad Foundation Volleyball Tournament will take place at Zuma Beach to raise funds and cardiovascular health awareness. It is Arista’s mission that the foundation “inspires youth to live as Chad did-healthy body, healthy mind”-by sponsoring athletic events and artistic expression promoting “traditional American morals and values.”
“Chad affected everyone he met,” said Arista. “There was an enormous outpouring of support for our family after he passed. Eventually, we formed the foundation to solidify everyone’s feelings about Chad, the way he lived, how caring he was. We wanted Chad’s death to help prevent another athlete with a preexisting heart condition to go undiagnosed.”
Chad especially loved football and led a very physical and healthy lifestyle. His mother has a photograph of Chad at a dance where others are holding beers, while Chad holds a glass of milk.
Arista believes Chad wanted her to help others. “In a way, he left me to carry the ball for him.”
The metaphor took on a life of its own when the foundation partnered with Dr. Archie Roberts, cardiac surgeon and former pro football player, to give complete cardiovascular screenings to high school and college athletes. Said Roberts, “We look for not only the game-breaker-the cardiomyopathy-but also the early risk factors for cardiovascular disease.
“About 30 percent of high school kids are coming up with one or more abnormalities,” Roberts said, warning, “We have assumed that young people were healthy, but what we’re seeing is they have hypertension, obesity and increased stiffness in their arteries.”
Competition and self-image often drive athletes beyond their bodies’ limits. A Los Angeles Times article attributes 11 pro, college and high school football players’ deaths in 2001 to grueling pre-season drills conducted in sweltering heat. Over-the-counter supplements thought to enhance sports performance can be bought at supermarkets and health food stores. It’s now known that their action can directly affect the heart. According to the FDA, ephedrine is implicated in causing 80 deaths since 1994-it can put a dangerous strain on the heart when coupled with vigorous exercise and/or a preexisting heart condition.
For Arista, it’s most important to inform and educate athletes, coaches and parents, as well as the public at large, about preventable cardiovascular risk. The Chad Foundation holds as many events as funding allows in order to offer free echocardiogram tests to all participating players, reaching out to as many schools as possible. Currently, the foundation is in talks with coach Rich Lawson of Malibu High School to provide cardiovascular screenings to its athletes.
“What’s so important about the screenings,” according to Arista, “is that we can raise cardiovascular awareness and prevent deaths of at-risk young people.” She hopes the knowledge will lead “every school to have an automated external defibrillator (AED), so in the event of cardiac arrest, lives can be saved.” Besides revealing structural heart abnormalities, such as HCM, the screening results will create a national database, the National Cardiovascular Screening Lifestyle Initiative for medical and scientific research.
The tests at the volleyball tournament will consist of an echocardiogram and tests for hypertension, diabetes, obesity, cholesterol and basal metabolic rate. The goal is to intervene in as many as 60 to 70 percent of individuals who would be at high risk from HCM.
Registration will take place from 9 a.m. on, at the Zuma Beach volleyball courts near Tower 2.
More information can be obtained by contacting Arista at 212.935.4503 or Collin Butrum at 818.262.5180 or by visiting the Web site, www.chadfoundation.org.
Yes on schools
Thank Heaven for Dierdre Roney and similar parents who are devoted to their children and dedicated to making the Malibu community a better place. They do so by investing in the current and future needs of the public schools and needed recreational facilities by supporting bond issues for the benefit of all. They also sacrifice their precious time to share their many talents for improving schools and their community.
Prop X and Prop Y are succeeding in building better schools and improving school quality and service. This success will continue through the dedicated efforts of our fine new School Superintendent, John Deasy.
There will always be those who respond to real issues with muddy insults, ignorance of facts, denial of reality, backward vision and rejection of plans for the future; Luddites, such as recent hostile writers, whose only goal is to denigrate and destroy through less than civil comment.
Persons, such as Laure Stern, Dierdre Roney and Mona Loo and many like them are only to be praised and encouraged for their foresight, hard work and sincere commitment to the common good.
Ralph H. Erickson
Serra Retreat avoids huge fines for creek crossing
Homeowners in Serra Retreat were facing fines of $27,500 a day because they repaired a concrete ford across Malibu Creek this past April.
The ford on Cross Creek Road consisted of several concrete slabs that were washed downstream when the creek flooded in January-a frequent occurrence over many years. Routinely, residents have hired a crew to repair the crossing.
But as they were about to rebuild it again this year, they were stopped when the National Marine Fisheries Service declared Malibu Creek a “protected steelhead habitat.” That meant that the concrete ford – called by engineers an Arizona Crossing – was “not permissible” because it was a barrier to steelhead trout trying to swim upstream to spawn.
Although plentiful in the creek decades ago, steelhead trout were thought to have disappeared entirely by the 1990s. But environmental watchdog Heal the Bay reported sightings of small numbers of steelhead in the creek in recent years, and lobbied for their protection.
Serra homeowners appealed to the City of Malibu for an emergency permit to restore the crossing and keep it open for traffic. The permit was granted on grounds that Cross Creek Road is one of only two fire escape routes from Serra Canyon and is essential for fire safety.
The crossing was restored in April. That triggered reactions from the California State Water Quality Control Board and the enforcement arm of the National Oceanic and Atmospheric Administration. The state threatened a $10,000-a-day fine. The federal agency threatened a fine of $17,500 daily.
Homeowners were given 60 days to come up with a better plan for crossing the creek that would not impede spawning steelhead. One option was to build a sturdy bridge high overhead. But that would cost a million dollars or more.
The solution they proposed was to construct a more advanced version of the old Arizona Crossing. The new structure would be built of one large concrete slab stretching about 60 feet over culverts, or open drains, that would allow fish to pass through. Pylons to make it flood-resistant would reinforce the crossing. Cost to Serra property owners was estimated at about $100,000.
Hold out for Hope
The National Association of Realtors established the Realtors Housing Relief Funds to raise money to help victims’ families meet their housing costs. NAR has opened the fund with an initial commitment of $1 million.
CAR, our state association, has made an initial donation of $25,000 today. I have made a personal donation and my hope is that you will be moved to make a contribution as well. For now may we continue to hold out for Hope.
Hope for peace and comfort throughout our nation today, and for the days to come. Hope for justice to be served to those individuals who horrified our Great Nation. Hope that God reaches down and lifts up America physically, emotionally and spiritually.
God Bless America in our great time of need. And, we pray that we can continue to hold out for Hope.
Beverly Taki
National Association of Realtors
Prayer for remembrance
On September 11, 2001, unbelievable catastrophes occurred. Faceless terrorists forever changed our view of the world. All of us have experienced a myriad of emotions that do not let up. Waves of disbelief engulf us. We experience various stages of shock. Our hearts are heavy and we are numb. And most of all we are very sad.
We must forever honor those whose lives have been lost, we must tend to those who are hurt, we must cry with the families and friends who lost a loved one. Each American of every ethnicity, color and creed has experienced a horrible loss.
The United States can look at history for the defining challenges and threats that it has had to face. Each time the American people responded with a steady resolve. Each time the American people determined their course of action and each time the Americans have acted deliberately.
Let us pray for an appropriate, just, and effective response to this terrorist act. Let us pray for those who lost their lives. Let us pray for the family and friends who suffer this loss and let us continually pray for the United States of America and the world at large.
Joan House
Mayor, City of Malibu
View from an Afghani-American
The following was written by an Afghani-American writer and e-mailed to a Malibu resident.
I’ve been hearing a lot of talk about “bombing Afghanistan back to the Stone Age.” Ronn Owens, on KGO Talk Radio today, allowed that this would mean killing innocent people, people who had nothing to do with this atrocity, but “we’re at war, we have to accept collateral damage. What else can we do?” Minutes later I heard some TV pundit discussing whether we “have the belly to do what must be done.”
And I thought about the issues being raised especially hard because I am from Afghanistan, and, even though I’ve lived here for 35 years, I’ve never lost track of what’s going on there. So I want to tell anyone who will listen how it all looks from where I’m standing.
I speak as one who hates the Taliban and Osama bin Laden. There is no doubt in my mind that these people were responsible for the atrocity in New York. I agree that something must be done about those monsters. But the Taliban and bin Laden are not Afghanistan. They’re not even the government of Afghanistan. The Taliban are a cult of ignorant psychotics who took over Afghanistan in 1997. Bin Laden is a political criminal with a plan. When you think Taliban, think Nazi SS. When you think bin Laden, think Hitler. And when you think “the people of Afghanistan,” think “the Jews in the concentration camps.”
It’s not only that the Afghan people had nothing to do with this atrocity. They were the first victims of the perpetrators. They would exult if someone would come in there, take out the Taliban and clear out the rat’s nest of international thugs holed up in their country.
Some say, “Why don’t the Afghans rise up and overthrow the Taliban?” The answer is, they’re starved, exhausted, hurt, incapacitated, suffering. A few years ago, the United Nations estimated that there are 500,000 disabled orphans in Afghanistan-a country with no economy, no food. There are millions of widows. And the Taliban has been burying these widows alive in mass graves. The soil is littered with land mines, the farms were all destroyed by the Soviets. These are a few of the reasons why the Afghan people have not overthrown the Taliban.
We come now to the question of bombing Afghanistan back to the Stone Age. Trouble is, that’s been done. The Soviets took care of it already. Make the Afghans suffer? They’re already suffering. Level their houses? Done. Turn their schools into piles of rubble? Done. Eradicate their hospitals? Done. Destroy their infrastructure? Cut them off from medicine and health care? Too late. Someone already did all that.
New bombs would only stir the rubble of earlier bombs.
Would they at least get the Taliban? Not likely. In today’s Afghanistan, only the Taliban eat, only they have the means to move around. They’d slip away and hide. Maybe the bombs would get some of those disabled orphans-they don’t move too fast, they don’t even have wheelchairs. But flying over Kabul and dropping bombs wouldn’t really be a strike against the criminals who did this horrific thing. Actually, it would only be making a common cause with the Taliban-by raping once again the people they’ve been raping all this time.
So what else is there? What can be done, then? Let me now speak with true fear and trembling. The only way to get bin Laden is to go in there with ground troops. When people speak of “having the belly to do what needs to be done,” they’re thinking in terms of having the belly to kill as many as needed. Having the belly to overcome any moral qualms about killing innocent people. Let’s pull our heads out of the sand. What’s actually on the table is Americans dying. And not just because some Americans would die fighting their way through Afghanistan to bin Laden’s hideout. It’s much bigger than that, folks. Because to get any troops to Afghanistan, we’d have to go through Pakistan. Would they let us? Not likely. The conquest of Pakistan would have to be first. Will other Muslim nations just stand by?
You see where I’m going. We’re flirting with a world war between Islam and the West. And guess what? That’s bin Laden’s program. That’s exactly what he wants. That’s why he did this. Read his speeches and statements. It’s all right there. He really believes Islam would beat the West. It might seem ridiculous, but he figures if he can polarize the world into Islam and the West, he’s got a billion soldiers. If the West wreaks a holocaust in those lands, that’s a billion people with nothing left to lose; even better from bin Laden’s point of view.
He’s probably wrong. In the end the West would win, whatever that would mean. But the war would last for years and millions would die-not just theirs, but ours. Who has the belly for that? Bin Laden does. Anyone else?
Tamim Ansary
