B10 Sunday, April 16, 2017
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Daily News
BUSINESS
ARBOR OUTLOOK
Cubs, Saints, Fogerty and play ball
“A’roundin’ third and
headed for home … It’s a
brown-eyed handsome
man …”
Margaret R. McDowell
T
his week my beloved
Cubbies begin their
first World Series title
defense in 109 years, if my
math is correct. My husband, a diehard New Orleans
Saints fan, warns me that
things will never be the same
now that the Cubs have
climbed the mountaintop.
He says he suffered
through decades of losing
with the Saints; then, when
they defeated the Colts in
the 2010 Super Bowl, a brief
period of joy was actually
From “Centerfield” as
recorded by John Fogerty
followed by a lingering
sense of ennui. The Saints
had finally won it all. What
was left to hope for? What
could possibly top being
world champions? As Peggy
Lee (thank you Leiber and
Stoller) sang in her 1969
hit, “Is That All There Is?”
Beyond the glorious feeling of being champions and
discarding the longtime
loser label, at least there
are significant economic
benefits associated with
a winning sports team,
right? At least that’s what I
always assumed. Turns out,
though, the financial impact
of professional sports franchises on local economies
is actually fairly negligible,
regardless of the quality of
the team. Why? Because
residents enjoy a finite
amount of discretionary
income. If they don’t spend it
at the ballpark, they’ll spend
it somewhere else instead,
usually in restaurants, stores
or at other special events.
Or perhaps by investing the
money in a business. So if
a sports team moves away,
there is no real loss to the
area’s economy. The dollars still get spent, usually
locally, just on other things.
A California city controller
conducted a study that stated
that the economy around the
Staples Center might actually
improve if the Lakers moved
away. Victor Matheson concurred. Matheson, a sports
economist at College of the
Holy Cross, noted that traffic
congestion and activity associated with a sports team can
actually repel folks from living, investing and shopping in
a community. Sports economist Michael Leeds said in a
marketwatch.org article, “Are
Pro Teams Economic Winners for Cities?,” “If you ever
had a consensus in economics, this would be it … There
is no (economic) impact.”
Local officials frequently and
fervently disagree, though,
and here’s where things get
complicated. Civic pride and
identity are involved. What
city or state wants to lose their
team? Local business owners
A Ph.D. in debt
Borrowers must fight
for themselves
as student loan
reforms are rolled back
By Gail MarksJarvis
Chicago Tribune
T
he U.S. Department
of Education under
Barack Obama had
discovered through
numerous studies
that people with
student loans were getting
awful service — even incorrect information — when
they called student loan call
centers to find out what to
do with their loans. Reforms,
which were outlined but not
yet implemented, were supposed to fix the problems.
Among the problems: Student
loan call centers not answering
phone calls from borrowers at
convenient times, not telling
borrowers how to make payments they could afford, and
not warning borrowers about
extra fees. Instead of providing customer service, the staff
taking borrower calls often
simply shoved them through
the system, according to the
studies. Borrowers reportedly
INVEST
Continued from B9
total return since November
sadly trails a 6.7 percent
total return for the Standard
& Poor’s 500 index. About 40
percent of ACSI’s portfolio
includes Yahoo, T-Mobile,
Dr Pepper, eBay, Vonage
and HP. Utilities, consumer
cyclical issues and consumer
defensive issues make up 60
percent of its performance,
which is as exciting as watching a Japanese Kabuki dance.
COMPETE
Continued from B9
member of the Gold Medalwinning team receives
$5,000; each silver medal
team member wins $2,500;
and each bronze medal team
member wins $1,000.
Additionally, all Whataburger family members at the
winning restaurants receive
10 percent of the finalist prize
amount; $500, $250, and $100
respectively.
“WhataGames is more than
a competition to us, it’s a way
*
Madigan has been among
those calling for reforms for
years. Besides consumer
groups, the Government
Accountability Office and
Consumer Financial Protection
Bureau have conducted detailed
studies faulting the Department
of Education for not policing
the private companies, known
as loan servicers, it hires to collect loan payments and answer
calls from student borrowers.
Madigan’s office is suing
one of the largest companies
with a government contract,
Navient Corp., descended
from Sallie Mae.
The suit claims that instead
of serving 12 million borrowers with $300 billion in student
loans and helping them onto the
right track for paying their loans,
Navient incentivizes its employees to get rid of callers quickly.
The complaint says: “Instead
of taking more time to discuss
other options with borrowers,
such as income-driven repayment plans, Navient saved
itself money and cost borrowers millions of dollars in added
interest on their loans. … They
repeatedly misled borrowers
about their options to bring
their loans current.”
were pushed into skipping payments instead of being told how
to handle their obligations.
In frustration, many borrowers have been giving up
and walking away from their
student loans without paying
anything. Studies claim this is
a significant driver of defaults,
and a burden for taxpayers.
About $137.4 billion in federal
loans are now in default.
Yet, with a new administration in charge of student
loans, the reforms aimed at
curing those ills were aborted
in a memo this past week from
Secretary of Education Betsy
DeVos. What she plans to do
instead of the reforms isn’t
clear. The department didn’t
respond to my request for
more information. But consumer advocates are worried
that she will allow old practices
to continue and leave student
loan borrowers without the
help needed to avoid defaults.
Illinois Attorney General Lisa
Madigan’s take on the change
is: “The Department of Education has decided it does not
need to protect student loan
borrowers.”
Bak’s portfolio is sterile,
and his methodology needs
a shot in the fundament.
Though a focus on customers’ satisfaction and becoming repeat customers is
unique, it don’t pop my cork.
Successful investing uses
such time-valued metrics as
earnings, book value, cash
flow, dividends, operating
margins, net profit margins,
return of capital, debt and
working capital, which are
based on historical performance. Though past performance is not a guarantee of
future results, it’s certainly a
better indicator of a company’s future stock price than
knowing whether Otto, Paul
and Priscilla like Vonage.
So no, a thousand times
no, I cannot recommend
ACSI shares for two reasons. 1) I don’t share your
awe of Fornell. Though his
methodology is used by
industry movers and shakers to measure how well
companies are perceived
by the public, it’s not an
acceptable way to predict
the future performance of
companies. 2) Because this
ETF is so small (a $17 million
portfolio), I doubt it can stay
around long enough to be
meaningful. The quarterly
costs to run ACSI exceed
its ability to pay salaries
and accounting and operational expenses. Therefore,
I suspect that either ACSI
will close its doors soon
and distribute its assets to
shareholders or a larger ETF
will take over the portfolio.
for us to bring together the
entire Whataburger family to
celebrate our hard-working
teams in a fun, spirited environment full of energy and
excitement,” said Rob Rodriguez, SVP of restaurants.
Created in 1996,
WhataGames is a companywide tradition committed to
enhancing the Whataburger
experience for team members
and customers alike.
WhataGames Finals is the
featured event during the
Whataburger Family Convention held at the Gaylord Texan
Resort & Convention Center.
The convention is a family
occasion, hosting Whataburger corporate and regional
representatives, franchisees and suppliers and the
WhataGames national
finalists.
The Miramar Beach Whataburger team is the only team
from Florida competing. The
only other one competing
that is located in the South is
in D’Iberville, Mississippi.
“This is special to me as I
live in the Panhandle,” said
Cartledge.
Whataburger was established in 1950 when Harmon
Dobson opened a small roadside burger stand in Corpus
Christi. He gave his restaurant a name he hoped to hear
customers say every time
they took a bite of his madeto-order burgers: “What
a burger!” Within the first
week, people lined up around
the block for his 25-cent 100
percent beef burgers served
on five-inch buns.
Today, the company is
headquartered in San Antonio with sales of more than
$2 billion annually. The local
Whataburger is located at
10725 Emerald Coast Parkway
across from Sandestin.
Visit www.whataburger.
com for more information.
*
Please address your financial questions to Malcolm
Berko, P.O. Box 8303, Largo,
FL 33775, or email him at
[email protected].
in downtown Cleveland assert
that their operations have been
revitalized since LeBron James
returned to play there. The
governor of Missouri offered
the Rams $400 million to stay
in St. Louis rather than move
to Los Angeles, but to no avail.
My hometown has a myriad
of professional sports franchises. And I want them all to
stay in Chicago, especially one
of the baseball teams. Go Cubs.
Margaret R. McDowell,
ChFC, AIF, author of the
syndicated economic column “Arbor Outlook,”
is the founder of Arbor
Wealth Management,
LLC, (850-608-6121 —
www.arborwealth.net),
a “fee-only” registered
investment advisory firm
located near Sandestin. W E E K LY M OV E R S
■ PNC Financial Services
Group Inc.: Closed week at
$115.80 — The regional bank’s
first-quarter results were
far greater than analysts
expected but the stock
retreated in late trading.
■ Scana Corp.: Closed week
at $65.80 — High-dividend
utility companies lost ground
as bond yields made a recovery after sharp losses late
Wednesday.
THE WEEK AHEAD
When you’re the largest
brick-and-mortar retailer in
a world filled with more and
more cyber-buyers, how do
you defend your territory?
By leveraging what could be
your biggest liability — your
stores.
In the week ahead, that’s
how Wal-Mart will respond
to its quick-growing competitor Amazon.
What had been a destructive price battle has turned
into an all-out war for the
hearts and wallets of consumers. The two retail
behemoths represent the
clash of shopping cultures
— pursuing aisles versus
surfing websites — and the
business models built to
support them.
Amazon’s approach
involves stuffing inventory
into strategically placed
warehouses to avoid the cost
of actual stores and using its
volume to drive deals with
shippers to get merchandise
the last mile to consumers’
doors.
Wal-Mart, meanwhile,
is saddled with the infrastructure of a different age
of retailing — a network of
thousands of stores, their
miles of aisles and more than
100,000 products in each
location.
Wal-Mart is discovering,
though, that the network
might actually be more of
an asset than an issue.
Beginning this week, WalMart will offer deep price
discounts on 10,000 items
shoppers are able to buy
online and pick up in stores.
It’s using its size to
undercut Amazon on price
and hoping to use its wellspread stores as a means
of reaching customers.
Wal-Mart will expand the
offering to 1 million items
by June.
If successful, who
knows: Wal-Mart stores
may eventually be equal
parts warehouse and retail
experience.
Whatever happens, WalMart shareholders can only
hope the moves result in
an Amazon-like stock performance. Amazon shares
have gained four times more
value than Wal-Mart shares
over the past year.
*