Boulder Report

Where did you think the stock market would close for 2008?

Earlier this year, the Wall Street Journal asked readers to submit their best guess on where the Dow would end the year. At the time, I think the Dow as sitting at about 13,000, and I emailed my answer: 10,500. 

In a way, I'm almost breathing a sigh of relief that the Dow closed the year today down just 34 percent, at 8,776. At its low of the year, about 7,800 in November, I started wondering if it could indeed end up 50 or 60 percent down for the year.

I'm just one in a long line of investors lamenting how quickly the value of our IRAs and stock investments collapsed. From Lehman Brothers' bankruptcy filing in August to the rushed $700 billion bailout plan, if nothing else, 2008 did make for some fascinating business reading. Let's hope 2009 isn't a repeat.

So here we sit, the Fed's overnight rate virtually zero, investors rushing into Treasuries pretty much for the assurance that at least they'll get their money back, tales of perhaps the biggest Ponzi scheme ever still unraveling, and forecasts that we've yet to see the bottom of the housing market crash. And why did the market close up on the last day of the year? Your guess is as good as mine.

They tell us that here in Colorado, things are a little better. And that's probably correct, compared to maybe Michigan or Nevada. At least the ski areas have lots of snow. And the Broncos will get a new coach. 

The reality of it all is it was very, very hard year for investors to end with some sort of positive return. While new IPOs were scarce, the few that did get done have lost value. On a chart of 21 IPOs I just checked, only four have increased in value.

It was such a crazy year, I'm pretty sure even the most cautious investment advisers are trying to explain to their clients where their money went. Many, like those at Merrill Lynch, now find themselves working for a bank and aren't really sure what their own future holds.

Wallstrip blog had a discussion, "Dow low can you go?" Will the new Obama administration give hope to investors? How many more billion-dollar checks of taxpayer money will be written to steady the sinking ship?

I'm heading to a New Year's Eve party tonight, and how do I already know many of the discussions will be on this exact topic? 

To keep things in perspective, sure you can think back to Oct. 9, 2007 when the Dow hit an all-time high of 14,164. Those were the days my friend. But there's also the bottom of the bear market way back in 1974, just a year after I moved to Colorado and thought my $250 weekly reporter salary was pretty darn good. What did the market close at then? 577. That's right, 577. 

 

Boulder history lesson 101: Change inevitable in business

Maybe, in times of economic uncertainty, one needs only to look back in history to come to grips with how innovation inevitably changes the business landscape.

 The fact of the matter is that any business – newspapers being one in their own headlines recently -- unwilling to adopt quickly to far-reaching technologies such as the Internet simply go out of business.

 I thought immediately of the U.S. automakers and their stubborn reliance on selling gas-guzzling (but previously profitable) trucks and cars while listening to a recent lecture by Boulder author William L. Reich, who wrote “Colorado Industries of the Past,” published this year by Johnson Books.

Here in Colorado, and in Boulder, Reich looks at some of the major business empires of their times, some of which today we only see in boarded up mines or building foundations -- “remnants of that bygone era.”

Then, as today, it was all about supply and demand. The Japanese carmakers figured it out with safe, fuel-efficient cars that didn’t break down while GM brought us the Hummer.

In the 1800s, as early Colorado pioneers arrived, many thought they could strike it rich in gold only to discover how impossibly hard mining was. Businesses making the real money, of course, were those that figured out what everyone really needed – transportation, food (grains, vegetables and fruit), beef and other meats, ice to keep everything from spoiling, and, of course, essentials like beer and cigars.

Other industries took off as the gold rush reality set in, Reich writes. Brickyards for buildings and homes, millinery shops making hats and dresses for the women, saddle and spur makers for cowboys and cowgirls, and a large sugar beet industry. “By the mid-19^th century,” Reich writes, “sugar was no longer considered a luxury item enjoyed only by the wealthy.”

One of the best-known spur and bridle manufacturers, Crockett Spur and Bit, operated here in Boulder, starting in 1943 when it moved from Lenexa, Kansas. It employed up to 125 workers at 944 Pearl St. Business slowly dried up as the passenger car replaced the horse and buggy.

The mining of precious metals, both silver and gold, did become a major industry for Colorado, and Reich describes  how new inventions improved not only the efficiency of the mines but also the life of the miners.

J. George Leyner, born in Left Hand Canyon west of Boulder, eventually patented the air and water drill, helping to reduce rock dust in the air and preventing many miners from a death of silicosis.

The mining industry was especially entrepreneurial, with hundreds of patents for new pumps, mechanical tables and chemical processes to extract gold and other metals from the ore piles. Reich weaves in interesting old photos and illustrations of mills, furnaces and mining techniques in his book’s chapter on “Mining Precious Metals.”

So what happened to many of the bedrock industries? Innovation for the most part.

It’s hard for us to consider, as we grab some ice out of our frig, how everyone depended on the icehouses. Early on, before electricity, ice was harvested from frozen lakes and stored with sawdust or hay.

Adolph Coors, Reich writes, built his icehouse – 60 by 40 feet and 16 feet high – along with his brewery in Golden.

Boulder had its own beermaker, the Boulder Brewery, eventually renamed the Crystal Springs Brewery. Now we support our own local microbreweries such as Boulder Beer, Avery and Mountain Sun.

While lighting up a cigar easily gets you kicked out of a bar today, almost every Colorado town had its own cigar rollers, who sold their product through drugstores, billiard parlors and saloons, Reich writes.  “An average cigar maker rolled and turned in about 200 to 250 cigars a day, so he would make between $15 to $20 per week, good wages for the times.” Today, a high-quality cigar might cost you $10 to $15 just for a smoke.

Those old cigar boxes, now collectibles, indeed were small works of art, with specialty brands such as the Denver & Rio Grande R.R. Scenic Line Cigar or Colorado Maid Cigars, using Victorian women as the advertising image.

“Colorado Industries of the Past” is full of stories of businesses that helped determine Colorado’s future. Only time will tell if our governor’s new program to build jobs and companies to renewable and clean energy will succeed.

What new breakthroughs in solar, for example, could doom the forecasted landscape of huge wind turbines on the plains?

Boulder celebrates its 150^th anniversary in 2009, a good time to become reacquainted with our colorful history. Booms and busts, you’ll find, are nothing new. For a new startup or car building legends like Ford and GM, change is inevitable. It’s a lesson all businesspeople – and their investors -- eventually learn.

10 reasons why someone needs to save the Rocky Mountain News

Here are 10 reasons someone need to save the Rocky Mountain News.

1) Tabloids are more fun than broadsheets.

2) 225,000 weekday subscribers; 400,000 on Saturday

3) Baseball reporting by Tracy Ringolsby.

4) Real estate reporting by John Rebchook.

5) Denver Press Club might go broke again.

6) One less newspaper for radio talk shows to steal stories from.

7) Gossip by Penny Parker.

8) Post owner Singleton doesn't need any reason to lay off more staffers.

9) Denver doesn't need anymore people in PR.

10) win, lose & Drew by Drew Litton

Pheasant hunt success in Winner, South Dakota

Our hunting group, out for pheasants in Winner, South Dakota, maybe the pheasant hunting capital of the world. How do you describe a limit of 27 pheasants in three hours? Wild birds, not planted. You call it getting to the Pheasant Bar way too early in the afternoon!

For a full report, check out Pheasantopia. 

Get ready for hot rumor mill surrounding sale of Rocky Mountain News

The Rocky Mountain News is for sale. So is the Miami Herald. So is the Grand Junction Sentinel.

With more than 35 years in Colorado journalism, 10 of those as an editor at The Denver Post, I never worked for the Rocky, although I made some calls and sent in my resume right after I took a buyout offer at the Post. While at the Post in the '80s, I was smack in the middle of what was called one of the most intense news wars in the country. When you got beat by a story in the Rocky, you needed to have a very good reason why in that day's news meeting. It was a very exciting time, and depending on what month or year it was, the rumors flew hot and heavy that one paper or the other was going to win.

I realize I'm part of a dying breed -- currently subscribing to four different newspapers: the Rocky, the Post, the Boulder Camera and the Wall Street Journal. And that's print, not the online edition although i did buy the online subscription to the Journal. I will confess I tried to stop on Denver paper's subscription this year, but under the JOA, it was only about $20 more to get both vs. just one. So I decided just to deal with the big recycling pile.

So where did I hear about the breaking news of the Rocky sale? Twitter. Sipping a coffee on Thursday afternoon, I was reading the Twitters I follow and there was Boulder blogger Dave Taylor's link to the Rocky story. A bit of New Media irony.

After the last two quarters, where the Rocky's losses increased, I told several friends I was starting to think the Rocky's days were numbered. In this case, I wish my instincts hadn't been right. I really hate to see just one daily get a lock on the market. 

Of course, Phil Anschutz's name has been tossed around as a possible buyer, since he presently runs the online Denver Examiner and has several newspapers now around the country. But I can't see the Denver billionaire wanting any part of a JOA with the Post, especially one that's losing money.

Canadian newspaper owner David Black, owner of Victoria-based Black Press, is another rescuer name that surfaced from a few newspaper contacts. No doubt, several names will be tossed about in the rumor mill that is bound to pick up steam. Keep an eye on Denver's Westword, which just reported on counseling assistance offered at the Rocky, and the Denver Business Journal, which reported on Scripps' meeting with the Post owner in November, telling them they planned to close the Rocky "as soon as possible."

Hope springs eternal as Boulder retailers wait for shoppers

When more than 100 people line up in the cold and snow for a $20 gift card to Best Buy, is that a good omen or bad for the holiday shopping season.

I was there, 10 a.m. on a chilly Friday. Only the first 50 received the gift card, but everyone got a rousing welcome from applauding employees, tunes from a brass quintet and … yes, cheerleaders in white go-go boots and sparkly silver pom-poms.

Welcome to Retailers Desperately Want You for the Holidays.

Talk about service. Four different smiling employees asked me if they could help. Opening day, for sure.

I strolled around, checking out the $259.99, 33 disc set of every Sopranos episode, the Sony Blu-Ray disc player for $299 and – now on my Christmas list -- the digital photo frame that fades from one photo to the next, on sale for $79.99.

There wasn’t a whisper about Best Buy’s own forecast, just two days earlier, that changes in consumer’s spending habits were nothing less than “seismic,” and the company is facing “the most difficult climate” it’s seen in its 42-year history. Something tells me that wasn’t in the pep talk for these anxious new employees.

Some employees might be refugees from the now bankrupt Circuit City, closing hundreds of stores and liquidating some $350 million of inventory to pay off real estate debt.

The night before I joined guests for the opening of Ellie’s Eco Homestore, an innovative green products concept that rightfully chose the eco-friendly Boulder market to test our spending willpower for natural and organic goods.

The new store, at nearly 10,000 square feet, is a spin-off of the growing green products wholesale business of Boulder-based Eco-Products, www.ecoproducts.com. Founder Steve Savage is testing his belief that Ellie’s, named after his daughter, will draw shoppers to a one-stop center for everything green, from non-toxic paints to organic cotton apparel from Nau (which closed its own retail store here) to compostable dinnerware that helped grow Eco-Products.

Savage is aboard a green business marketplace that is growing in times of other corporate cutbacks. Big corporate customers like Toyota, eBay and the University of Colorado legitimize his company’s ambition to become a leading brand of food service products.

In September Eco-Products secured a $2 million first round of funding from Greenmont Capital Partners, where Boulder natural food gurus Barney Feinblum and “Hass” Hassan are part of the management team. That money, Savage said, did not go toward his retail opening.

Locating Ellie’s next to another Boulder entrepreneur’s baby, Mike Gilliland’s Sunflower Market in the Village Shopping Center, was intentional, Savage says.

He reads the news, and knows the economy’s troubles. But “the green products business that we are in is doubling every year,” Savage says. Competitive prices, employees who know the eco-product lineup well and local print and online ads keep Savage hopeful.

Now it’s wait and see if shoppers go green for Christmas.

National mid-priced retailer J.C. Penney, with third-quarter sales crashing 53 percent amid October’s stock market debacle, has cut forecasts for the holiday buying season. Same worried outlook for Kohl’s and Nordstrom.

The headlines have to give pause to just about any local retailer, although you wouldn’t know it by the smiles and immediate service you’ll find walking into their stores.

They’re looking for local customers however they can find them, many even creating their own Facebook profiles and tossing out a Twitter now and then. My new “friend” Downtown Boulder just sent me a message: “Shop Local, Give Local, for a prosperous new year!”

For new downtown merchants like Kevin Natapow, who with his wife Jenny opened Momentum on Pearl Street’s East End just over a year ago, a little guerrilla marketing can go a long way.

The owners of Momentum, which sells fair trade and handmade goods from artisans in 55 different countries, have their fingers crossed.

The couple bought their holiday inventory last fall, pretty much before the “big collapse,” as Natapow describes the current economy. They stocked up for what they expected to be a “normal” year; now they’ve got to wait and see, too.

Unlike the bigger chains, sales so far seem to be holding up, as the couple’s first year in business have made them have a little more savvy in a competitive downtown market.

“What we’re hearing,” Natapow said, “is people are really thinking about what they’re going to buy,” and “buying local” works in their favor.

Momentum also believes in “cause marketing,” hosting sales events benefiting local nonprofits. “Come by tomorrow if you’re hungry,” a clerk told me as she wrapped up a beaded bracelet from India. On a crucial Saturday afternoon, the store was donating 100 percent of its profits to the Denver’s Women Bean Project.