Today I stretch our business blog in memorium of the day.
On this anniversary of a great national tragedy that occurred on September 11, 2001 we would be remiss not to take a moment of silence to remember those who lost their lives in and around the World Trade Center, the Pentagon and Flight 93. We also should extend that moment of silence to our fallen and wounded veterans that have sacrificed their lives in Afghanistan, Iraq and elsewhere since that day. Furthermore we should salute our troops that remain far from home to this day in service of their country, risking lives on our behalf in a war that is far from over and presents many continued difficulties ahead. Yet it is useful to think about what changes the event has wrought on our economy.
Since 2001, when we were all horrified by this barbaric act of terrorism against an unaware civilian population, we have tried to go about our business. Our nation has had to adjust to the realization that we are a constant target and yet continue to actively pursue the values and goals that celebrate the freedoms that make the United States unique in the world and unique in history.
For the most part we have conducted our business as usual without allowing the dictates of others to affect our thinking. That said, we remain more vigilant and have to keep our guard up at all times. The travel industry is not the same and has still not fully recovered. Our transportation and delivery systems have been forever altered. The cost of doing business has increased in many sectors of the economy. The security industry and military industrial complex has seen a tremendous influx of capital and specialized technologies are receiving increased levels of research and development capital as well.
We can consider ourselves fortunate and lucky that we have not had to endure another 9/11 act of terrorism on our shores, but it is inevitable that we will some day, and we are in preparation for that too. We can probably attribute some of this to extra precautions and vigilance. We have also protected ourselves somewhat by bringing the fight to our enemies' shores and occupying them with our local military presence and constant pursuit of the leaders and command structure, at least causing some level of distraction. Europe and Asia have not been so lucky with terrorist acts occurring in Great Britain, France, Spain, India, Pakistan, Indonesia and elsewhere. It is an international problem and requires international attention and cooperation.
Back to Business: Each tragedy that strikes our nation and our economy rocks our financial boat. And each time our boat has been rocked in treacherous seas we rebalanced ourselves and remained afloat. In my reading about the great investors of our generation and generations past, a reoccurring theme is that there will always be catastrophic events. Each generation faces new tragedies and dilemmas. Each new generation must find their way and search out solutions to their problems. But each difficulty also presents opportunity.
John Templeton, who started the Templeton Funds, was reputed to have begged and borrowed $40,000 in 1930 after the stock market crash and during the great depression, to purchase the shares of a thousand companies at pennies on the dollar. Most went bankrupt, but those that survived eventually reached new highs and became the leaders of a new robust market, making up for any losses.
Among our Blogging Stocks companies only Google (GOOG) is new to the market since 9/11 and they have done well to date, increasing 400% in value since their Initial Public Offering. Apple (AAPL) too has exceeded expectations under the leadership of CEO Steve Jobs invigorating the company with new products and new optimism for the future. eBay (EBAY) and Yahoo (YHOO) have increased in value but they have been on more of a roller coaster ride. They still command high valuations and the market anticipates they will be around a long time to come. Time Warner (TWX) climbed about 35% in the first two years following 9/11, but has drifted in a tight range for the last two years and generates much angst from investors who have trouble figuring out where this company is going. Microsoft has gone down and bounced around as the anticipation of their Vista Program has been delayed multiple times, Xbox has grown in market share and still is losing money, and numerous other pursuits drag them sideways. Even their mountains of cash which looks great on the books weighs down their earnings per share. General Electric (GE) and Wal-Mart (WMT) have not advanced for many years but have increased shareholder equity -- maybe they're due for some gains.
All of these companies play on a world stage that has grown economically over the past five years and continues to grow. There will be economic valleys and peaks ahead but capitalism is here to stay. The people of the United States are not united on every issue of our day, but we stand united against any tyranny that would attempt to shake us from our roots. One day I hope all of our battles will be fought with the power of our ideas and not the destructive weapons of the military. Until that day we should salute our soldiers and remember them be they near or far.
Sheldon Liber is the CEO of a small private investment company and the vice president for Design and Research of an Architecture & Planning firm.
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Reader Comments (Page 1 of 1)
9-11-2006 @ 5:18PM
Morris said...
Sheldon, good screed basically! Business has remained resilient for many reasons and indeed, deserve our constant support; however, business would not succeed were it not for the truly optimistic consumer. Lets all remember that 2/3 of all goods and services are "consumed" by humans, just like you and me. I believe, in the final analysis that we will overcome these difficulties by a combination of removal, dialogue that seeks changes within the states supporting terrorism and strong effort by the moderates within the larger Muslim faith. Main battle Abrams tanks and cruise missiles may be helpful but not in the long run. Lets get back to some sense of reasonableness.