OUR FINANCIAL ADVISORS AT WVRC ON JAN. 20th
ED JACKSON provided the Invocation, plus some prior comments. He was pleased to be up and about. His neighborhood is apparently anticipating the arrival of train service unusual for Los Angeles. He is glad he woke up in America, and in Southern California, and glad to be here in Westwood. He is glad that at age 14, he got to know the Red Cross, and about Service Groups and their importance to the community. Enjoy your Rotary! And that’s a really upbeat beginning, ED Thank You. MARK ROGO led the Pledge, followed by the Four Way Test. LENNY FRIEDMAN and RICK BROUS came forward for the song, LENNY pointing out that he was becoming a bit unsteady on his feet. We did God Bless America, rather well.
There were lots of guests. PP PETER MORE introduced Christer and Marianne Liljenstrand, a Flying Rotarian from the Lvlea-Norra Rotary Club in Sweden. SHIRLEY MORE was also present. PAT ANDERSON was with ANDY, and SHARON BRADFORD was with PP CHRIS, who also introduced Jennifer, a hopeful Ambassadorial Scholar applicant. MARK ROGO brought his mother. PEGGY BLOOMFIELD was with her helper. PATRICIA BUMPAS was with us, as was SALLY PHILLIPS. Mohammed Said, who belongs to the Rotary Club at the University of Minnesota, reminded us that while he teaches at Minnesota, he has both a bachelors and masters from UCLA. A frequent visitor was Renato Remoldo, from Beverly Hills Rotary. And of course SUNNY was with LENNY.
TOM BARRON came forward to be recognized for receiving a $100,000 gift from Donald Sterling for the Catholic Educational Foundation, of which TOM is President. The downside of all this is that it cost TOM a fifty buck fine. TERRY M. WHITE reminded us that the upcoming Valentines Brunch is set for April 12th at the Bistro Gardens, so do get your checks in, please.
JOHN HEIDT brought David Bloom, who is in charge of Volunteers at UCLA they were planning the next event which will be this April, and they need help in assigning overseers for this program. David spoke briefly, and we were pleased to learn that UCLA has more volunteers for this activity than any other University in the country. Lastly, DWIGHT HEIKKILA reminded us of the Dance Marathon which our Rotaractors will be participating in on Feb. 19th it’s a 26-hour event and will benefit pediatric Aids research. Again, they need our support, please.
President GORDON asked LEO TSENG to rise. GORDON then spoke about LEO having been on this Financial Panel for at least the last fifteen years but he now feels he has done his time, and so we won’t be hearing about his adventures with the ‘Dart Board’ this year. Another long-time participant will be missing DONN CONNOR is on a Leave of Absence, so his words of wisdom won’t be forthcoming. The other missing participant is DICK ROBINSON, of course.
The Moderator, as always, was PP STEVE SCHERER, who proceeded to outline where we have been in the past. He reminded us that the last two years have been particularly disruptive. And last year, the DOW gained 11%. The S&P 500 added 13%, and NASDAQ gained almost 17%.
This past August, Federal Reserve Chairman Ben Bernanke began to signal that the Federal Reserve might ramp up its purchase of Treasury Bonds, to try to depress long-term interest rates. The performance of 10-year Treasuries was extraordinary. They began the year at 3.83% and ended the year at 3.3% - really low interest rates. The 1 year Treasuries drifted lower, starting at .4 and ending at .26%. He outlined our predictions made last January and noted that the Investment Advisors were more precise than WVRC in general. The Advisors' figures were an average of their various predictions, of course. STEVE began by asking what the membership predicted for 2011. The DOW was expected to go up 5 to 10% - as was the S&P. NASDAQ the same. The 1-year up slightly, and the 10-year about the same.
JIM CRANE was our first predictor. He began by stating that it was always good to sell high and buy low but for JIM, he prefers rebalancing your portfolio every quarter. That is, sell those that went up, and buy those that went down. He is a fan of International investments. He figures the DOW at 12,273, the S&P to 1330, and NASDAQ 2,865. The 1-year at .3% and the 10-year at 3.5%. In mid-year, when the Fed stops buying, we will get a truer picture. He prefers Mutual Funds to individual stocks, and his choice is Prudential Financial Services Class A, PFSAS.
RICK CULLEN was up next. He began by stating that his bank was shut down in January 2010 because it had too many low interest or non-performing loans. He was searching for a bank that looked good. Note that the five top banks control just over 50% of the entire loan business. His choice is Bank of America, for several reasons. And by the way, he quoted a cartoon in the New Yorker, where they pointed out that the DOW average often was the same as the portfolio manager’s IQ! He expects the DOW to end at 12,000. The S&P, 1300. NASDAQ about 2000. 1-year Treasury between .5 and .7 and the 10-year 4.5%. Getting back to his pick of BofA, he thinks it provides the best ‘risk/reward’ potential. US Bankcorp, sells for about twice its value BofA currently sells at .7 of its value but a year ago it was selling at half that. He feels they are over-reserved in their loans, and that is quite helpful. They did end up with two companies Nationwide, and Merrill Lynch both of which still have some warts, but he likes the potential. They will be eligible to pay dividends, which again, he likes.
DWIGHT HEIKKILA began by saying, “Cheer up, everybody!” He was before, and still is, the most bullish of our Analysts. 1-year treasury, no change. 10-year, 4.5%. The DOW, 13,600. NASDAQ, 3270. S&P 1474 and he noted that he hit this right on the head last year. Emerging markets look good, and the continuing tax cuts will stimulate. Corporate profits are good and getting better. His choice of a financial partner is Wells Fargo.
One of our newer members is BRIAN WHITNEY his first time on the Panel. He figures it’s all downhill from here… He then quoted a definition of economists they exist to make astrologers look reputable! 1-year treasuries, .25, and 10-year, 4.0 DOW 13,000. S&P, 1400. NASDAQ 3100. While he works for UBS, he likes ING. They do most of their business in North America. They are trading at about 7 PE, vs. about 6 last year. Summary, short & sweet.
PP STEVE SCHERER was last up. He expects the DOW to go up about 8%, and the S&P about 10%. NASDAQ up 15%. 1-year Treasuries about .4, and 10-year, about 3.8% For a stock he thinks it’s time to take a bit of a flyer. Global Cash Asset Holdings, trading at present at about $3.00, but has been as high as $11 and as low as $2.00. You may make a lot of money but it can only go to zero!
And now, Q&A. After some backandforth, the question was, is there some way to take advantage of the large percentage of our population that is Latino? The consensus, which was slow to emerge, was that ethnic differences didn’t make much difference. The next and last question had to do with the importance of good management and again, the consensus seemed to be that it was always helpful to have.
Our thanks for our Advisors and good luck to you all.