Saturday, January 10, 2009

No One Warned Me That Old Yeller Was Going To Die!

From the Desk of Joseph R. Rollins

With the excitement surrounding the recently released movie version of “Marley & Me,” I couldn’t help but be reminded of going to see “Old Yeller” when I was a young child. I’ve been a Labrador retriever owner virtually my entire adult life, which I’m sure is from seeing Old Yeller’s loyalty to the Coates family in the beloved film. There are only a few films from my childhood that actually left an impression on me, but “Old Yeller” is certainly at the top of the list.

Growing up in rural Tennessee, our family had one small, black and white television set with rabbit ears and terrible reception. We watched the “The Wonderful World of Walt Disney” religiously, and one of my heroes at age 8 was Fess Parker who played the title character in the “Davy Crockett” Disney television series. You can imagine my excitement when I heard that Fess Parker would be starring in the Disney-produced “Old Yeller.”

In the 1950’s, going to the movie theater was an all-day experience. No one really worried about when a movie was scheduled to start or end; we simply went to the movie theater and stayed almost the entire day, watching not only the marquee movie (sometimes over and over again) but also the various film shorts and previews.

I hadn’t read Fred Gipson’s novel, “Old Yeller,” prior to going to see the movie, so I had no idea what the story was about. The main draw to the film for me was that Fess Parker was in it. Because it was produced by Walt Disney, I had my father’s stamp of approval to go see it. I can remember my father dropping me and my brother off at the movie theater one Saturday for a day of “movie madness,” and I also remember him giving each of us $1 to last us the entire day. The ticket to get in was a whopping $0.25, and the remaining $0.75 had to be carefully budgeted to buy our junk food and sodas throughout the afternoon.

“Old Yeller” centers on the Coates family, rural Texans who are very poor. One day when the father, played by Fess Parker, is away on a cattle drive, they receive an uninvited visitor, a scruffy “yeller” Lab mix. Yeller proves his loyalty to the family time and time again by saving them from frightening situations. One of the boys, Travis, grows especially close to Yeller, despite having been somewhat skeptical of him when he first showed up at the house.

Near the end of the film, Yeller develops rabies while protecting the family from a rabid wolf. Travis realizes he must protect his brother and mother from Yeller, who has started showing signs of madness from the rabies. In a heartbreaking scene, Travis tearfully shoots and kills Yeller. Did you cry, too, when you first saw “Old Yeller”?

In an effort to cheer-up Travis, who is devastated from the death of his beloved dog, he is given a puppy sired by Old Yeller. Travis initially refuses, but after his father explains the circle of life, he accepts the puppy, naming him “Young Yeller.”

Watching “Old Yeller” again recently, I noticed that the film would be considered amateurish by today’s standards. However, the story is just as moving now as it was back in 1957, and the climactic scene where Travis kills Old Yeller and makes his first step towards manhood is just as emotional and timeless. I may not have known Old Yeller was going to die when I first saw the film 52 years ago, but its rawness was still a jolt to my emotions when I watched it again the other day.

As an aside, I didn’t remember Chuck Connors being in “Old Yeller,” and I was surprised to discover that he had a role in the movie. After “Old Yeller,” Connors starred in “The Rifleman,” quickly becoming another one of my heroes. Connors had been both a professional basketball and a baseball player, and he is one of the few athletes who was able to play two professional sports successfully.

In the ABC series, “The Rifleman,” Connors played “Lucas McCain.” I vividly remember asking for a toy rifle (a politically incorrect toy for a child nowadays) just like Lucas McCain’s for Christmas one year. Similarly, several years after Disney had made Fess Parker a star in “Davy Crocket” and “Old Yeller,” he was cast in Fox television’s “Daniel Boone.” Oddly, the Davy Crocket and Daniel Boone characters both wore coonskin hats and carried big knives, making me forever mix-up the television shows…

Like “Old Yeller,” “Marley & Me” tugged at my dog-owner heartstrings. Before watching the film last night, I had actually read John Grogan’s memoir of the same name. In it, Grogan details the 13 years he and his family had with the boisterous and sometimes destructive yellow Lab named Marley and the invaluable lessons they learned from him.

After all my years of owning and breeding Labs (Daisy’s two litters totaled 20 pups!), I can relate to Marley’s various shenanigans and how his sometimes wild behavior and undying devotion impacted the family. I can also relate to the grief felt by the family after Marley’s death from old age. Truly, the only downside to owning a dog – even a nutty dog – is that they have such a short lifespan.

The movie version of “Marley & Me” is very good, although there are some differences between the film and the book. Grogan’s memoir details Marley’s neuroses quite explicitly, many of which would have been difficult to translate to film. However, the movie is still excellent, and even though I knew the ending, it didn’t make it any less sad to watch.

Just like no one warned me that Old Yeller was going to die in 1958, no one warned me that 2008 – 50 years later – would be such a devastating year for the financial markets. But the financial news was not nearly as bad as what the media was reporting, and I continue to be in the camp that believes much of the Wall Street carnage increased due to all the negative news being reported by the media. But whatever the reasons, 2008 was undeniably a tumultuous and wealth-endangering year.

As the 2008 year came to a close, the Dow Industrial Average finished down 31.2% for the year. The Standard & Poor’s Index of 500 Stocks was down 37%, and the NASDAQ was down 40%. OUCH! There’s no way to sugarcoat the terrible performance for the year; it was, in a word, devastating.

The 2008 investment year can essentially be summarized very simply. In 2008, there were only two classes of assets that made any money: cash and Treasury bonds. Everything else lost money, and in many cases, in a big way!

As I have previously explained, in every other year of investing, asset managers would typically move to a higher position in fixed-income assets to accomplish less volatility in a portfolio. But in 2008, that strategy did not help. Bonds, like stocks, suffered losses in the double-digits. In many cases well-respected long-term bond funds lost close to 30% for the year, and therefore, only cash and Treasury bonds seemed to offer any buffer to the sell-down that occurred (principally in the 4th quarter of 2008).

I truly believe that things are getting better now for the financial markets. I’m not implying that the economy is getting better, but as I’ve pointed out before, it’s not necessary to wait for the economy to recover for stock market performance to improve. In fact, there is even a general air of optimism being reported in the news! I don’t know whether this has to do with the incoming Obama administration, but quite frankly, given the avalanche of negative news that all of us have endured, any form of positive message would be a welcome improvement.

Something that clearly illustrates the investing public’s perception that the financial markets are improving is the current situation concerning U.S. Treasury bonds. As I pointed out in my December 13, 2008 post, “What We’ve Got Here Is a Failure to Communicate,” investors that ran to the safety of Treasury bonds did so at the risk of a significant amount of capital loss over a short period of time.

As 2008 came to a close, the 10-year Treasury bond was threatening to break below 2% annualized. Investors that were late in buying those bonds have now suffered through a dramatic decline in principal in the four trading days that have occurred so far in 2009. Four trading days since the beginning of the New Year, the 10-year Treasury is now yielding close to 2.5%. These investors have incurred a massive loss of over 4.5% in principal in a little less than one week. So much for the safety of investing in Treasury bonds!!

A featured article in Investor’s Business Daily this week pointed out that money market accounts that invest in U.S. Treasury bonds are now on the verge of offering negative returns. Since these money market accounts require some expense to manage the funds, there is not enough of an investment yield to pay those expenses. For the first time ever, these money market accounts are now facing the difficult task of either closing entirely or offering potentially negative yields to the public. It seems that the public is finally recognizing that other forms of risk capital, like equity and bonds, now offer an alternative to the zero interest rates Treasury bonds are offering.

Another obvious sign of an impending recovery is the incredible publicity regarding the efforts by Congress to revive the economy. The ante keeps being upped almost every day. It’s important to recognize that the original $700 billion in TARP money has not even been completely expended. The $350 billion doled out to the banks has barely been in the system, and the remaining $350 billion of the TARP money has yet to be allocated. I think we will live to regret trying to push the remaining money into the economy if we don’t wait to see whether the $350 million that has been expended has been effective.

I fully realize that I previously stated that it’s better to over-stimulate the economy rather than take the risk for it to not be stimulated enough. However, the question really becomes, “How much is enough?” With these two stimulus bills alone, we are talking about nearly $2 trillion in additional stimulus money. Additionally, the Federal Reserve has launched their program to buy mortgages, pushing down long-term home mortgage rates significantly below 5%. It would have been more desirable to wait and institute these programs gradually to determine the progress before funding the next program. I guess we will never know now since it is clear that a bipartisan Congress will approve a gigantic stimulus package sometime before February 15, 2009.

Democrats in Congress originally touted an economic stimulus plan of approximately $100 to $300 billion. Over the last week, this money has grown exponentially to $700 billion to $1 trillion. Unlike the TARP funds, this money will not be invested in assets that will be returned back to the Treasury. Rather, these assets will be invested in tax cuts and infrastructure for building bridges and roads. In other words, once this money is spent it will be gone forever, which is concerning. There’s no question that the economy has stabilized over the last month. But my fear is that this incredible flood of money from Congress’s economic stimulus package will destabilize the economy in the coming years. I fear that the economy will already be improved before this money is ever spent.

On another matter, the press – which is quickly becoming my #1 nemesis – is at it again. The Atlanta Journal-Constitution recently stated that the U.S. deficit would exceed $1.2 trillion in 2009. While the deficit unquestionably has the potential of getting that large, the AJC didn’t bother providing the specific details. In fact, after reviewing the specific bill, it’s fairly clear that some of these expenditures will only happen one time and will not be ongoing expenditures.

It’s currently estimated that the TARP will generate a loss of only $184 billion in the 2009 budget as compared to the $700 billion deficit being proclaimed by the press. During this budget year, the Federal government will invest $218 billion in Fannie Mae and Freddie Mac. This is a one-time investment that, in fact, should generate net positive returns to the Treasury in the future. In addition, the Federal government has invested $24 billion in the FDIC to stabilize that fund for potential bank failures and will not be recurring in future years.

Accordingly, in the Federal 2009 budget, $426 billion is expected to be expended on one-time only items. Unfortunately, the media doesn’t seem to take those facts into consideration when publicizing the potential deficit. For the press to say that this potential deficit is a higher percentage of GDP than the deficit for 1980 – which is something I have been reading lately – is completely false.

The economy doesn’t need to fully recover in order for stock prices to start climbing upward. What we really need is for the economy to stop going down, not turn up. If all of us suddenly realized that the economy had bottomed, the stock market would begin to turn-around practically overnight.

Not many people realize that the financial markets actually traded positively for the month of December in 2008. I wouldn’t be surprised if you hadn’t heard this positive news. With the avalanche of bad news being provided by the media, it is really hard to uncover even the smallest amount of positive news. However, the Dow Industrial was up 0.6% for December, the NASDAQ was up 1.1% and the S&P 500 was up 2.8%. These returns for December were quite excellent, and it was a good way to end an otherwise disastrous year.

One reason why I feel that movement is starting to happen is because of the improvement we have seen in stock prices since the market bottomed on November 20, 2008. Since that day through today, the Dow Industrial Average is up 15%, the S&P 500 is up 21%, and the NASDAQ is up 23% (not including dividends). The stock market is clearly improving, although it’s hard to see that with all the negative news we’re being provided.

I want to reiterate that the volatility we suffered in 2008 was completely unusual. I recognize that investors felt devastation every time they reviewed their dwindling portfolios, and I can tell you first-hand that money managers were feeling the destruction every minute, 24-7. It is incredibly difficult to explain all the wild moves and volatility when the economy doesn’t even support those drastic moves. In any event, I think it’s safe to say that we’ll never in our lifetimes see the type of volatility that occurred in the 4th quarter of 2008.

In the history of stock market investing, there have only been 37 days where the S&P moved over 5% in a single day. Of those 37 days, 18 of them occurred in 2008. For perspective, there were two days of 5%-plus moves in 1950, one in the 1960’s, one in the 1970’s, seven days in the 1980’s, four days in the 1990’s, and four days from the period from 2001 through 2007. In 2008, when the S&P moved 5% or more on 18 days, seven of those days were positive and 11 were negative.

In essence, we had more 5% moves in the S&P 500 during 2008 than we have had in the entire history of investing prior to 2008. In terms of volatility alone, the 4th quarter of 2008 was like suffering through 57 years worth of volatility. I don’t believe that we’ll ever have to suffer through this level of volatility again – it was clearly a year for the ages!

It’s also interesting to see the analyst projections for the stock market for 2009. The general consensus of market analysts is that the overall improvement will be 10% for 2009. However, I regularly see potential gains in the stock market in the 30% range. I suppose no one really knows what is getting ready to happen insofar as stock market performance. However, with the incredible flood of money that the United States and the rest of the world are forcing the economy to accept, business will improve this year! The stock market will foresee that improvement in business and will react accordingly.

In closing, I’ve said before that it’s never a bad time to make your IRA contributions. However, right now couldn’t be a better time – the opportunity to make money for your retirement is staggering. Since the New Year has begun, you can now make your contribution for 2009 while the market is still low.

Additionally, if you haven’t already made your contribution for 2008, you can make your contribution for that year at the same time. If you are less than 50-years old, the maximum amount you can contribute per year is $5,000 (a total of $10,000 if you’re contributing for both years). For those of you who are 50-years old or older, the maximum contribution amount per year is $6,000 (a total of $12,000 if you’re contributing for both years).

The benefits to contributing to your IRA are tremendous, especially when the markets are at such low levels and they are expected to significantly increase. Please feel free to call our office at 404-892-7967 if you have questions about contributing to your IRA.

As I’ve explained above, I expect significantly better stock market performance in 2009 than we have enjoyed over the last four to five years, and I think it’s already starting to happen.

Best regards,
Joe Rollins

Thursday, January 1, 2009

Pistol Pete and Me

From the Desk of Joe Rollins

January 1, 2009

I graduated from a rural high school in 1967 and ventured into the “real world” of big cities and fast action when I left my hometown to go to college at the University of Tennessee in Knoxville. To say I was na├»ve back then is an understatement. Knoxville was the largest “city” I had ever visited in my childhood, and my experiences as a freshman on the Tennessee Vols basketball team were sometimes sensory overload. To play a game in front of 17,000 people at the old Stokely Athletic Center was terrifically exciting. In fact, more people attended Tennessee basketball games in those days than my hometown’s entire population.

While I realized there was more to the United States than the small radius I was familiar with, I did not have the opportunity to travel much outside of the visits to local rural churches I took with my dad. In fact, my geographical knowledge was fairly limited to northeast Tennessee. While attending college, I quickly learned about other parts of the United States, which I found more interesting than the area where I grew up.

I was recently reminded of one of the infamous trips I took as a freshman on the University of Tennessee basketball team. During those years, we traveled on an antique two-engine prop plane, which was, looking back, clearly not safe. On a particular trip, we flew down to Baton Rouge, Louisiana for a game, and while I knew of New Orleans, I wasn’t familiar with Baton Rouge at all and assumed that it was another rural, agricultural area of little interest to me.

To make the trip more interesting for the teams, the coaches arranged for us to take a side trip on a bus to New Orleans for a day. Bars were 18-years and older in those days, so New Orleans was everything I’d expected and more. After watching a burlesque performance by Rita Alexander, “the Champagne Girl,” (not to be confused with Lawrence Welk’s Champagne Lady), I realized that girls in Tennessee were a lot different than the girls in New Orleans. They definitely didn’t make girls like that in Tennessee!

Many years later I returned to Baton Rouge to meet with a client, Jimmy Swaggart Ministries. We managed their trust and annuity funds for a few years until Jimmy had some personal financial woes. As I’m sure you can imagine, my trip to Baton Rouge that time was nothing like the trip I took back in 1967.

Our game against the LSU freshmen team in 1967 was greatly anticipated since “Pistol Pete” Maravich was playing on the opposing team. It’s hard for me to believe that Pete and I were in the same grade level in college since he passed away over 20 years ago at the young age of 40. I guess that goes to show that being a great athlete doesn’t make you invincible from a health perspective.

Those of you who remember “Pistol Pete” more than likely recall his incredible basketball skills. We played during segregation, when basketball leagues were primarily made up of slow white guys like me who couldn’t jump. But Pete Maravich was more talented than the rest of us. He truly had a special talent. After watching him play, I quickly realized that I would probably not be successful at making a career out of basketball and needed to focus on my studies.

Pete became famous in the following years for his drooping socks and long hair, but I don’t recall him looking particularly disheveled when I played against him at the Huey Long Field House that night. When we showed up to play the freshman game, we were expecting a small audience. In the freshman games I’d played up to that point, most fans didn’t bother arriving until closer to the time the varsity team played, but this particular game was standing room only well before the freshmen took the floor. Pete had developed quite the reputation for being a prolific scorer, so people flocked to watch him play.

Our game plan was to hold Pete down, and we concentrated the entire defense to slow his scoring ability. That night we played a box-and-one defense, with me covering Pete. I was 6’4” back then, and Pete was about an inch taller than me. The Vols were great at holding Pete down that night – we scored 48 points – but he still managed to score 60 points all by himself and the Tigers defeated us handily. After the game, the entire Field House emptied, leaving almost no one to watch the varsity game that followed.

When I moved to Atlanta in 1973, Pete was playing professionally for the Atlanta Hawks. There was no cable TV in those days, and regular TV reception tended to be spotty. I vividly recall looking for somewhere to live in Atlanta where I could pick up Channel 17, which broadcasted the Hawks games. I also remember attending many of Hawks games at the old Omni and scoffing at the outrageous $6 ticket price to get a seat close enough to the court to see Pete play.

In the 1970’s, Pete had an apartment in the legendary Riverbend complex overlooking the Chattahoochee off I-285. Later on, Steve Barkowski (the #1 pick in the NFL draft) moved into the same complex. Riverbend was the place for singles back then since the clubhouse and pool at the complex had developed quite the reputation as having wild weekend parties. I confess that even I tried crashing (unsuccessfully) the Riverbend parties to experience the afternoon shenanigans.

After establishing records that continue to stand in the collegiate ranks, Pete continued to excel in the NBA and ultimately became one of the youngest players ever at the age of 39 to be inducted into the Basketball Hall of Fame. When I think about Pete’s incredible career, I am always reminded of how his skills helped to determine my career path. I have to thank Pete for helping me discover that my talents on the basketball court were finite (i.e., not so good), and that I would be better served focusing on my studies instead of holding out hope for a career in the NBA.

Pete lived hard and suffered from alcoholism over the years. After retiring from basketball in 1978, Pete gave up the drink and focused on his Christian faith. He died of a heart attack after playing a church pick-up basketball game, less than a minute after telling someone, “I feel great.” An autopsy revealed he had a rare congenital heart defect – he was missing his left coronary artery and his right coronary artery was massively enlarged from overcompensating for the defect.

I suppose I also have to thank Pete for what I have endured in 2008 during these tumultuous financial times. If I had chosen to go for a career in professional basketball, I wonder if I’d be feeling as queasy from the stock market roller coaster ride we’ve been on. Honestly, even after suffering from the events of this past year I am still happy with the career path I chose. Pistol Pete had his talents and I have mine.

So what are my latest thoughts on the economy? One of the great myths of investing springs to mind: the belief that for every dollar lost, a dollar is made by someone else. Since this year, approximately $3 trillion in net worth was destroyed worldwide, and many presume that a like amount was made by other investors. This is incorrect.

Investing in stocks is similar to investing in real estate. If you need to sell a home right now, you may need to price it at a discount below its fair market value in order to get it sold quickly. Once it sells, then almost every other house on the block gets valued in the same manner. Even if someone in the neighborhood has no intention of selling their home, they suffer a major reduction in net worth due to the prices for which other houses in the neighborhood are being sold. The same is true for stock market investing. If everyone is selling an individual stock, the entire stock market will revalue that stock based on the lower selling price. That doesn’t necessarily mean the value of the stock is any less; it only means that it’s worth less on that given day.

For example, when someone sells a stock, there is a winner and a loser in that particular transaction. The seller loses if he has sold the stock at a price below its value, and the buyer of that stock has won based on the bargain purchase price. However, all of the other owners of that stock have also suffered a loss. By virtue of one person selling a stock for no particular reason and for a price below its value, everyone owning that stock will also suffer an identical loss even though they weren’t a part of that particular transaction.

You might be familiar with Ben Stein, a famous lawyer, professor, writer, actor (he was the monotone economics teacher in “Ferris Bueller’s Day Off”), and economist who writes extensively on investing for the New York Times and other renowned publications. Stein, like most of us, suffered a massive blow to his net worth during 2008. In a New York Times article published on December 26th, he laments on the mistakes he’s made over the years and discusses the dead wrong belief that it’s possible for someone to make money without ever losing any year-in and year-out. Click here if you’d like to read it: THEY TOLD ME THAT MADOFF NEVER LOST MONEY.

As 2008 comes to a close, we can all agree that the year will be one for the history books. The Standard & Poor’s Index of 500 Stocks is on target to close with a net loss of 40% for the year. This will be the second largest loss ever incurred since this index’s formation. The only larger loss was in 1931 at the height of the Great Depression.

In my “Cash is Trash” post, I stated that the U.S. government was trying to make cash irrelevant as an investment by forcing down rates to a point of being so low that investors will seek higher investment in stocks and bonds. While I certainly felt that rates would fall dramatically, I really didn’t anticipate just how quickly they would fall.

The other day, I asked Charles Schwab & Company to provide us with their best FDIC-insured CD rates. A one-year CD rate today is at 2.2%, a two-year CD rate today is at 3.15% and a three-year CD rate is at 3.45% today. Keep in mind that future inflation will likely be at 3.5% to 4% in a few years. Therefore, anyone locking up their money in a CD would essentially be losing purchasing power since the investment would not earn as much as the rate of inflation.

In contrast, the consolidated dividend yield for Consolidated Edison is presently at 6.1%, Phillip Morris is at 8.4% and General Electric is at 7.9%. Compared to CD yields, those returns are certainly attractive and with more favorable tax treatment.

Clients frequently ask me whether the U.S. is in an economic depression or not. I realize that this feeling of despair comes from the media’s constant usage of the word “depression.” I also realize that the so-called experts who are using that terminology when reporting the news really don’t understand the true definition of an economic depression.

For example, from 1929 through 1930, the entire GDP in the United States fell 8.6%. In the following three consecutive years, it fell 6.4%, 13% and 1.3%. In the period from 1929 through 1933, the U.S. GDP fell at a staggering 29.3%. On the other hand, in 2007, the U.S. GDP was close to $14 trillion. If we had a similar reduction in GDP equal to the same GDP as during the Great Depression from 1930 through 1934, we would suffer a decline of over $4 trillion. At that rate, we would suffer a decline bigger than the economies of every country in the world outside of the U.S. and Japan, including China. To be clear, our net reduction in GDP would be greater than the economies of every country in the world except for the U.S. and Japan. The likelihood of that happening borders on almost zero.

Avid readers of The Rollins Financial Blog recall that I have repeatedly commented on the media’s devastating effects to the economy. It’s unquestionable that they have contributed to a significant amount of our economic problems. The Lehman Brothers bankruptcy was practically made into a circus by the media in September and October. Coupled with the 24-hour a day speculation that all the banks would be going bankrupt and the economy was going to crash, it isn’t at all surprising that consumers began pulling back.

In fact, much of the downturn in the economy was due solely to consumers cutting back spending in the height of the media blitz on how bad the economy was going to get. We will never know whether the economy would have gotten so bad if the press hadn’t been speculating so negatively. We know it got bad, but the question is whether that was because of the media’s distortions of true economic facts.

I’m not certain if the negative reports regarding the economy are due to a lack of knowledge or if it’s an attempt to get viewers by sensationalizing the facts. In any event, the media was at it again just last week. They were hysterically exclaiming that the banks that have received TARP funds couldn’t even account for how the money was being spent. Surely journalists that report on the economy are more knowledgeable than that statement reflects.

This reminded me of a “Dennis the Menace” episode that centered on a similar banking issue. In it, Dennis deposited his entire net worth of $3.76 at his local bank. The next day, he returned to the bank with his savings passbook in hand and asked to see his $3.76. The teller counted out $3.76 and showed it to Dennis, but he was outraged to discover that the money the teller counted out wasn’t exactly the same money that he had deposited. His deposit included two quarters dabbed with green paint and a dollar bill missing a corner, but the money the teller showed him didn’t have any of those markings.

This is almost the same scenario as the TARP money. Does the press really expect the banks to take the government TARP money and bury it in the backyard? The banks simply commingled those funds with the other money they have on deposit. The banks are only concerned with the totals, not the specific items.

Something all Americans should feel grateful for during this awful 2008 is that there has not been another attack on our soil since the tragedy of September 11, 2001. Another encouraging sign is that all the major news bureaus are starting to close their Baghdad offices. CNN, Fox and other major news networks have determined that there’s not enough news coming out of Iraq to warrant maintaining offices in the country.

As we start to reduce the number of soldiers in Iraq, we will see an orderly transition from a military economy to a more civilian economy. Unfortunately that compounds our issues regarding unemployment as many of the returning soldiers will increase the number of unemployed looking for work. Of course, some of the soldiers will be redeployed on military missions in Afghanistan, but there won’t be anywhere close to the number of soldiers who are presently stationed in Iraq.

The progress made in Iraq over the last 12 months is amazing. If you haven’t read the statistics lately, I encourage you to do so. The fact that Iraq has turned from a brutal dictatorship to a democracy in less than six years (even if it’s a struggling and awkward democracy right now) is fantastic and very encouraging.

Those who argue that ridding Iraq of Saddam Hussein was not in the best interest of the U.S. just do not understand the economics of oil. I cannot even envision the destruction that would’ve occurred to our economy if Hussein was still in control of the oil in Iraq or had gotten control of the oil in Kuwait during 2006. Whatever the reasons were for our invasion of Iraq, the positive benefits of doing so are evident today. However, it’s unlikely that you’ll ever read that in the newspapers.

Likewise, our efforts in fighting the war on terrorism have been worthwhile. While the stock market has not treated us kindly this year, I think we can all be thankful for the fact that we have remained safe in a period of time where there is an enemy in the world that wants nothing more than to make sure the United States doesn’t survive. We will never be safe in the United States until this form of radical enemy is extinguished.

I hope that the terrible events of September 11, 2001 will never be forgotten. In our entire history, this was the only time a foreign enemy attacked us on our own soil. Close to 3,000 people lost their lives on September 11th – more than the casualties of Pearl Harbor. If we ever reach the point of complacency that we had prior to September 11th, it is almost a given that another attack will occur.

Many of my clients have visited my home for holiday parties and other gatherings over the years. I have hundreds of personal photographs on display along with sports memorabilia that I’ve collected over the years. One of the photographs I cherish most was taken several years ago when I was on a trip to New York City. I had positioned myself across the river with the World Trade Center Twin Towers rising up behind me. The Twin Towers were breathtaking and massive, and I wanted to have my picture taken with one of the greatest symbols of capitalism.

After September 11th, I had the picture enlarged and have it displayed on a wall in my house along with three professional photographs of the Twin Towers from the New York Times. This personal photograph is so important to me that I had the picture duplicated so I could have a copy in my office at Colony Square and also in my home office. Lest I forget, I want this picture to remind me every day how this tragic event changed our lives forever.

In closing, I’d like to leave you with a quote from Ben Stein’s New York Times article that should resonate with all of us:

“We are more than our investments. We are more than the year-to-year or day-to-day changes in our net worth. We are what we do for charity. We are how we treat our family and friends. We are how we treat our dogs and cats. We are what we do for our community and our nation. If you had $100 million or $100,000 a year ago and now you have a lot less, you are still the same person. You are not a balance sheet, at least not one denominated in money, as was explained to me recently.

Losing and making money are not moral issues so long as you are being honest. You may have a lot less money as this year ends than you did two years ago. But you are just as good or bad a person as you were then. It is a myth that money determines who you are, and if you have gotten over that myth by now, then 2008 will have been a very good year.”

Here’s to a happy, healthy and a quickly recovering 2009.

Best personal regards,
Joe Rollins