Wednesday, November 12, 2008

The Stock Market Is Nuts

Ok, I'm not a financial guru, expert, or even really well informed. However, one of the local stocks I follow is Paetec. I follow them because they're local, they're theoretically growing, and they're building a brand new corporate headquarters in downtown Rochester. I also own a whopping 140 share, that I purchased at $1.54 per share. That was an initial investment of only $215.60 (that includes the cost of the trade).

Today, their stock is hovering around .82 cents. That means that my 140 shares are currently worth a whopping $114.80. Now, on a personal basis, this isn't a big deal. It's basically a hundred bucks. I'll probably blow that on two or three reasonable bottles of wine in the not-too-distant future. However, look at things based on the total number of outstanding shares.

Paetec currently has 146,070,000 share outstanding and a market cap of just under $120 million. Their 52-week high was $12.75 per share. So, do the math and at that time the company had a market cap of $1.86 billion. My question is, is Paetec a $120 million dollar company or a $1.86 billion dollar company? Tomorrow they release their 3rd quarter earnings report, so that should be a good indication of at least the recent past, and may provide some guidance on the next few quarters. And we know that the economy is bad, so that undoubtedly plays a role in things. But did this company really lose $1.74 billion in value over a 52-week period? Oh, and while I haven't done the research to prove it, I'm pretty sure that the stock has only been trading as PAET for about a year.

I'll be very interested to see what they report tomorrow, but no matter what it is, I can't believe that they suddenly became only a fraction of their previous value on anything other than an emotional response to the market and the short-term belief that telecom is going bust (again). Given that the market and the overall economy moves in a cyclical pattern, this could be one hell of an inexpensive opportunity to buy shares in a company that I have no reason to believe is going to shut down soon.

Obviously, my own little personal stake is that if PAET goes back up to $10 a share I suddenly have $1400, rather than about $115. And, looking more broadly on Paetec's impact on the local economy and the psyche locally about how things are going, a higher stock price will obviously allay some fears that this firm is going bye-bye.

But isn't that the case with most of the big employers locally? Let's take a look at some of the other big guys in town:


Kodak - $7.44/share
Xerox - $6.65/share
Corning - $9.16/share
Paychex - $25.33/share
Harris - $33.48/share
Constellation - $10.86/share
Time Warner - $8.70/share

Really? These companies are only worth a fraction of their pre-economic-shitfest valuations? Suddenly assets such as cash, intellectual property, plant and land, goodwill, etc., etc., etc., are worthless? I know there are large chunks of debt associated with all of these firms, as well as future liabilities for obligations they must pay. But talk about a buying opportunity for people. Again, I'm no expert, and maybe I'm stupid here, but Kodak at $7.44 has got to be worth less than the amount of cash they have in the bank.

Also, I wonder how hard hit a company like Paychex would be in a down economy. Sure, firms will reduce payrolls, and some will go out of business, but are companies really going to be looking to do their own payroll rather than outsource it? If anything, given the still relatively small market penetration of outsourced payroll services, I would think Paychex could significantly profit from an economic downturn if they can show small and mid-sized companies how much they'll ultimately save by outsourcing their payroll services.

I guess in conclusion, Paetec's 1-year price estimate is currently standing at $4.50/share... I'll be very interested to see if it's even close. Regardless, I'm going to throw a little more into the pot and see what happens. At 83-cents, is it much of a gamble?

Tuesday, November 04, 2008

Northgate Plaza #2

I'm still hung up on this Northgate Plaza stuff. In the next week or so I'm going to go around and take photos of each storefront and post them here, just to give the Plaza some context, and maybe a little historical perspective. Unfortunately, there are no historical photos of the plaza that I can find! I was hoping the Monroe County Library might have some, but alas... no.

I'm still thinking in terms of other stores that could, in a perfect world, be located at the site and be acceptable to the community. One thing I was thinking of is a Sonic Drive-Through. Sonic, as far as I know, doesn't have any locations in Western NY. Now, maybe Sonic would have too many cars, but for only $2 to $4 million, you can put a Sonic at the Plaza. Granted, you'd need to build a new building, but howabout instead of a new McDonalds, tear down that side of the Plaza and put in a Sonic?

Locally, Great Northern Pizza just expanded into Henrietta. They were bought by 2 Hot LLC which also owns all the Bruegger's Bagles shops in town, and appear to have gotten a needed facelift. I know there was one in Greece on Ridge Road in an old bank building, and I did use it regularly, but it was really poorly managed and always felt dirty. I'd LOVE to have a brand new Great Northern Pizza located right there.

Heck, I'd love to see a Bruegger's at Northgate. I don't believe there is one nearby, and it'd be a great addition. I know I'm kindof focused on food, but food can be a major attraction that leads to retail. And again, I'm afraid given the demographics of the area around the plaza, there isn't enough money to justify some more boutique-esque retail. Other suggestions for smaller shops, especially ones that aren't currently in the area, would be appreciated!

Wednesday, October 22, 2008

Northgate Plaza

I live in Greece, NY - a north west suburb of Rochester. I actually live right on the border of the Charlotte neighborhood, which is actually the City of Rochester. I'm in about the oldest part of the town of Greece, and it many ways it shows. My street is actually pretty nice. The neighbors keep up their properties, and the "bad" properties of recent years have seen some very nice upgrades, so the street actually looks better than it did when we moved on. Now, unfortunately, the apartment complex on the corner of my street had a major fire a few weeks ago, so a big chunk of that building will likely be town down, so god only knows what's going to happen there.

My street is off another residential street, Denise, that intersects Dewey Avenue and Lake Avenue. It's the Dewey side that's troubling. The problem is, this strip is basically a commercial strip that had seen much better days. And a big problem is Northgate Plaza. Northgate, at one time, had stores like McCurdy's, Woolworths, and a mix of other small shops. Today, it has a Big Lots (with a sign that doesn't light up), and a few things that I do thoroughly enjoy... like the Hallmark Store, Tony's Birdland, and my bank is there too. In fact, since I've moved there, the Citizens Bank totally redid their space, and now it's a beautiful modern bank. But the rest of the plaza is really sad. There used to be a Video King Supercenter that we used all the time. That has now closed, and my wife and I have this running joke about a shopping cart that is in the window there that hasn't moved since they closed the store. The other end of the plaza has a bunch of empty stores, and a few stores that I just don't use. There is also what might be the slowest, 24-hour McDonald's, in the history of mankind. I've only been there once since I've lived there, but that one time was painfully slow.

There's a proposal on the table to tear down most of Northgate and put in a Walmart Supercenter. Now, it's a smaller version of most supercenters, but it's still planned to have a garden center, grocery store, and regular walmart component. Now, is this the greatest thing in the world? Of course not! In fact, I've only personally been to Walmart about a half dozen times in my life. But, the prospect of having a clean, well maintained plaza is attractive. The community is up in arms because they're afraid a Walmart here will bring in more traffic, crime, and lowered property values. I would argue that these people chose to live across from a commercial plaza, and you get what you pay for. And, there are some good barriers in place so that the plaza does not infringe on the residential neighborhoods. And, there are probably some ways to further close off the residential streets so that trucks and shoppers don't cut through, and I fully support that.

The other problem that opponents talk about is that they want to see a mix of smaller stores, and maybe some mixed use space, with residential as a component. Would I be thrilled if instead of a Walmart there was something that was a mix of, say, a Barnes & Noble, Camille's Sidewalk Cafe, Coldstone Creamery, Bath & Body Works, a small gardening store, and retention of the Hallmark Store, Radio Shack, Tony's Birdland, and Citizens Bank... as well as a new McDonald's building?! Of course! Is that going to happen? Do the demographics of the area - an older, working class neighborhood - support that kind of development?

If it does, then I'll run to the polls and vote for whomever can make that happen. But my guess is, that the area doesn't support that kind of development. Maybe it's an "if you build it, they will come" kind of thing, but that's the same kind of argument that public transportation advocates make for putting in a Rochester light rail system. I'd love to see something other than a Walmart, but I'm also a realist, and if no one is willing to invest in a property, other than Walmart, then that may be the only, or best, option.

Wednesday, October 15, 2008

Giuseppe Quintarelli

Ok, this is a departure from my last few posts, but as my friends know, I'm a huge wine fan. In fact, as I write this, I've already consumed half a bottle of 2002 Heitz Napa Cabernet, and a half a bottle of Hess Cab. Granted, the Heitz cost about 4x the Hess, but we started with the Heitz and then decided we needed more wine.

Anyway, I'm now on a mission. To learn as much as possible about Giuseppe Quintarelli as I can. And let me tell you, it's not an easy task. If you google him, you only get so much before the information becomes redundant. Why Wine Spectator, particularly in it's most recent edition which focuses on Italian wines, doesn't spend a little time on Quintarelli, I guess we'll never know. But considering how amazing his wines are supposed to be, I would hope Wine Spectator, of all magazines, would have spent some time finding and interviewing this guy.

So, just for the reader's information, I reproduce the following tidbit:

"It is the Chateau d'Yquem of Italy, absent the grandeur. It is IWM's fastest selling wine, yet has no marketing. It is the coveted gem of the Boot, but does not bear the prestigious name Sassicaia or Gaja. It is a legendary winery, without an estate. Its bottles are identified by hand scripted labels that provide a glimpse into the heart and soul of the world’s truest artisanal winemaker. It is Quintarelli!

Known as "the Master of the Veneto," Giuseppe Quintarelli makes some of the world’s most sought-after wines. From aperitifs to digestifs, his limited production Amarones, Reciotos, and Valpolicellas are the benchmark for excellence (along with Dal Forno, Veneto's other legendary producer). Their greatness stems from the inherent quality of the terroir and natural talent of this master, whose concept of vintage approval and strict grape selection rival the great Chateau of Sauternes. Giuseppe puts his wines on the market when he deems them ready, often keeping them in the cellar for decades until the right moment arrives."

How can this not be compelling?! So, yeah, I just dropped $280 on a magnum of the stuff. It's not the Amarone. I wish it were. But there was none available, and the price would have been much higher. So I got a magnum of 1997 Giuseppe Quintarelli Valpolicella Classico. I'm really looking forward to getting it, and will likely open it at a restaurant in town called Bacco. I'll be sure, of course, to post an analysis of the wine once it's been consumed. Oh, and it is a magnum, so it might be a good idea if another couple of people came along for dinner! I may save this for my 32nd b-day on 2/1/2009. If you're interested in joining Julie and me, let me know!

Thursday, October 09, 2008

Governor Patterson Needs NYers Support

The Rochester Democrat & Chronicle reports that the NYS Senate and Assembly want to wait before acting on Governor Patterson's request to cut an additional $2 billion from the State's budget. Apparently, they want to see the most accurate revenue projections before deciding on further cuts. They also refuse to talk about cuts in education funding. Now, with the Dow going under 8600 today, isn't it time to start looking for additional cuts to the state budget?

Unfortunately, we're talking about cutting education. But then again, there aren't that many areas that we can cut. Health care is generally off the table too. And, while now would seem to be the time to pull together some real structural reforms to these various systems, state government just kind of moves along as if everything is dandy. Maybe I'm just ignorant, and unaware of some very hard work to reform medicaid, the welfare system, education, and a host of other state supported functions. But my guess is they're not really tackling these issues.

And on the local level, whatever happened to the ongoing discussions around government consolidations? I'm not necessarily talking about the very politically unpopular idea of merging City and County governments, but what about those areas that are not political hot potatoes? Like lighting, water, snow plowing, and some other "low hanging fruit"? The problem with consolidation, though, is that no one is willing to give up power, and that's what consolidation is.

If I'm running Environmental Services for the City, am I willing to give up power to the County to manage things like dog licenses, dead animal removal, street sweeping, underpass cleaning, and a host of other functions? Am I willing to lay off government workers, and thus decrease my sphere of influence? If our leaders really wanted to make a difference, the conversation on government consolidation would be restarted, especially now.

The fact is that the economy may be in the doldrums for the next few years. Why not start the process of making government more efficient today, so that when the economy is growing again, the government entities that are left prosper even more? Do the City or the County really relish the annual announcements of budget deficits, cuts to essential services, and political wrangling to suggest that if only the Dem's or the Repub's were in control of things, we wouldn't be in this mess?

We have an opportunity in New York State and the Rochester region (obviously, Syracuse, Buffalo, et al do as well) to significantly improve the efficiency of government, laying the groundwork for successful government, and maybe even State, County and City budget surpluses when times are good again. Imagine if we were to improve the efficiency of City and County government by, oh, let's just pick a number... 22%. When the economy is roaring again, this more efficient government would see significant increases in tax revenues (sales tax, hotel/motel tax, property tax, etc.) that, if managed properly, could be set aside to make up for shortfalls in bad times. Granted, you'd have to legislate so that surpluses had to go into the equivalent of an endowment - as we all know government likes nothing more than to spend spend spend.

Sure, my IRA has seen it's value drop by nearly 50% over the last 6 months... but this is also an opportunity to invest more in quality stocks and mutual funds so that I can reap the benefits when the economy is strong again. Similarly, let's take this as an opportunity to increase the quality of government through enhanced efficiency. The opportunity is real, and the degree of urgency is high!

Wednesday, October 08, 2008

Last Night's Debate

So, last night was Round 2 of the Obama/McCain debates and what have we learned? Well, we've learned that John McCain supports the Treasury buying up bad mortgages from people too stupid to not buy homes that fall within their means (potentially a $300 billion bailout), and we've learned that Barrack Obama supports nuclear energy "as one component" of an overall energy independence program. See, I had to stretch with what we learned about Obama, because there was little, if any, new information provided. I'm not saying that McCain was overflowing with answers either, but there was something about his answers that seemed better informed than Mr. Obama's.

I did think Obama did an excellent job of answering the question of how the bailout will affect the average American. He's hit a home run linking businesses (large or small) ability to survive without access to cash. According to Mr. Obama, businesses risk not making payroll and thus potentially laying people off. Now, whether or not that's a totally accurate portrayal of the bailout is kind of irrelevant to me. It was a good answer and it's an answer that most people can understand.

I'll also admit that I didn't focus 100% on the debate last night. I was also surfing the web, going on Ebay and winebid.com, and checking my Facebook account. As Drudgereport is blasting this morning, "B O R I N G," I have to agree. However, I was impressed with Mr. McCain's overall demeanor last night, and give him a B+. I wish he would stop saying "my friends." It bugs me, and it's condescending. I'm not his friend, and the average American out there is not his friend. To me it feels insincere, even if he truly is being sincere. Please, stop saying "my friends."

But otherwise, he did do a good job. I thought that he took on energy independence well - stating a need for more investment in alternative energy sources including nuclear, wind, solar, tidal, etc. I thought he was strong on the message of reining in government spending. I may personally want to see federal earmarks for projects that I support, but Mr. McCain has a track record of trying to reduce frivolous spending. He also does have a track record of working both sides of the aisle. We have to remember one fundamental thing about John McCain - he truly is this maverick that SNL has been parodying. He's a maverick in the sense that he's willing to go outside the Big R political ideology, work with Democrats, compromise when it's needed, and stick to his guns when he feels he's right. He really DID work with Senator's Feingold, Leiberman, and Kennedy on joint legislation.

I just get the sense that Mr. Obama, on the other hand, is too conciliatory and lacks the ability to make a decision when things get difficult. Where are the Obama-"Insert Republican Senator's Name Here" co-sponsored bills? I certainly haven't heard about them, though I suppose they may exist. Of course, you would think Mr. Obama would want to diffuse McCain's "maverick" label by showing that he too is a maverick, or at the very least bipartisan. But my guess is that Obama's record doesn't support a bipartisan label.

Last night may have been an exhibition of talking points, personal attacks (albeit, not very vigorous ones), and light-weight answers to difficult problems, but it was still a good illustration of the difference between the two candidates. I'm not about ready to stand from the rooftops proclaiming, "Vote for John McCain!" quite yet, but unless I see some spark out of the Obama campaign, I have to stick with my political leanings and vote R.

Monday, September 22, 2008

McCain and his cars

I haven't written anything on this blog for a long time, and I'm amazed I'm taking a few minutes to do it, but I read an article  this morning about John McCain owning 13 cars and the negative fallout from it. It's not that he just owns 13 cars, it's that he also owns 2 foreign cars - a Honda and a Volkswagen. This, according to McCain-haters, shows that he's (a) a liar because he said he only drives American cars, (b) out of touch with the average American who probably only owns one car, and (c) destroying the American auto-industry because of the two foreign-made cars. There's also outrage from the UAW because McCain may have purchased a Toyota Prius for his daughter (or, it's possible the daughter bought it herself... that's still unclear.)

What is clear, however, is that McCain's own driver is a 2004 Cadillac CTS. The other American-made cars in his fleet include a 2007 half-ton Ford pickup, a 1960 Willys Jeep, a 2008 Jeep Wrangler, a 2000 Lincoln, a 2001 GMC SUV and three 2000 NEV Gem electric vehicles. But the killer is a 2005 Volkswagen convertible and a 2001 Honda sedan. So, that's 2 foreign cars to 9 American-made cars. Now, that's only 11 cars, but they're also counting the Prius that McCain's daughter drives, and a Lexus that Cindy McCain drives, but is actually owned by her beer-distributor company. So, worst case, that's 4 foreign to 9 domestic.

And, apparently you have to forget that Honda employs over 25,000 Americans, and VW will soon open a plant in Tennessee that'll employ another 2,000 people. But those employees are not UAW members, so they're both bad employers and probably bad employees too.

As the owner of a 2006 Honda Civic Hybrid, let me just say one thing to the UAW and the American auto industry in response to the Prius issue. IF YOU WANT ME TO BUY AN AMERICAN-MADE HYBRID CAR, BUILD SOMETHING THAT'S NOT A LARGE SEDAN OR A SPORT-UTILITY VEHICLE! I'm not interested in going from a giant gas-guzzler getting 12 mpg, to now getting 19 mpg. Nor am I interested in a sedan that goes from 22 to 29. Honda realized that people don't want that, and ended their Hybrid Accord. If I'm buying a Hybrid car, I want 40 to 60 miles-per-gallon.

I had made a decision, based on my driving requirements, that a small hybrid car made sense. That limited me to a Civic or a Prius. I personally liked the design and style of the Civic over the Prius, the cost was lower, and the government tax incentive to buy a Civic was better. That's right... the U.S. government incentivized the purchase of my foreign car in the name of global warming. So, which is it... buy green, or buy American?

I can't begrudge McCain's family for either owning 13 cars, or owning a few foreign ones in there. If anything, the McCains have done more than their fair share to support the American worker. I would bet that if you really looked at those foreign cars, you'd find they were either assembled in America, or included a lot of American-made parts. More and more, foreign car manufacturers are recognizing that they have to manufacture their cars closer to the market. Toyota, Honda, Nissan, BMW, Subaru, and lots of other foreign car companies build cars right here.

In a 2007 USA Today article, How American is that car?" there's a great list showing the percentage of American and Canadian made content, plus which cars were assembled in America. A great indicator of how ridiculous this argument is is the Honda Acura TL (as an example of a Honda sedan). The 2007 Honda Acura TL was made with 70% American/Canadian parts and assembled in Ohio. This was also the case for the Honda Accord. My own Civic Hybrid is 55% American/Canadian parts.

Let's drop this one as a topic of debate. Just because a car has a foreign badge on it, does not make it un-American to own, nor is it contributing to the downfall of the American auto industry. The unions and car companies are doing a fine job of that on their own.

Sunday, February 17, 2008

Lamberton Conservatory

So, this afternoon we were looking for something to do with Audrey. It was already about 2pm, and it's not exactly great outside, so that kind of limits what we can do. Also, since Audrey can't walk yet, it's not like we can go somewhere where she can play - for example, the Strong Museum of Play, which is somewhere we really would like to go.

Anyway, we ended up going to the Lamberton Conservatory in Highland Park. It's right off of South Avenue on Reservoir. I haven't been there for several years, so I was looking forward to it. What's really nice is, even on a cold crappy day (albeit, today was in the 40s, and not too bad out) it's fantastic inside. There's a great array of plants from tropical to dessert. For some pics, check out my facebook account - http://www.facebook.com/profile.php?id=1052074477.

What struck me is, what a great, totally underutilized space! For $2.00, I COULD go inside, find a nice spot, sit down and read a book. It's very quiet, and comfortable, and could be much more. I could soooooo see them adding a coffee cart, wireless internet connection, and maybe another wing to the place. Ok, maybe another wing is a bit much, but they could certainly add coffee and wireless. In fact, it might be a good way to raise some additional funding to build a new wing to the place!

Saturday, February 09, 2008

It's a boy!

Well, now the balance of power shifts back to the male side in the Gottfried household. We recently found out we're having a boy! Now I'll have someone to do all those father-son things with. Let's see... what father-son things did my dad and I do? Well, we regularly went booze shopping, and bought a fair amount of smoked fish, and um, yeah... let's see....

So, I'll have to figure out some stuff to do, but it shouldn't be a problem. And who knows, maybe Audrey will also be into booze and smoked fish?

Anyway, I'll be sure to update this with some of the ultrasound pics, as soon as the DVD arrives.

On another totally different topic, there have been a bunch of interesting developments going on for Downtown Rochester. A couple months ago, it was announced that Midtown Plaza would be torn down, the site remediated, and a new $100 million, 25 story (or so) tall headquarters for Paetec Communications would be built on a portion of the site. Well, two more interesting things happened over the past week. The first thing is, they broke ground on the first major residential project in High Falls where the old Kodak Visitor's Parking Lot was - across from the old Empire Brewing Company site. There's also another good sized residential development going up in the East Ave area down by The Little Theatre. And someone is converting one of the last old vacant industrial buildings inside the inner loop into more residential space. (I may go out today and take some pictures to add to a post later today). And in theory, there's another downtown residential project happening where the parking garage helix came crashing down a couple years ago.

Yesterday, it was announced that ESL Federal Credit Bureau would build a new corporate headquarters in Downtown across the street from the Strong Museum of Play. It's a $50 million project, with a six story building and a new parking garage on just over 3 acres.

After this announcement, next year the City will actually look like a growing place! There'll be at least three major construction projects going on downtown, with the possibility of 2 or 3 more. Plus, the Western Gateway project will be moving onto the next stage, which is basically resurfacing the entire chunk of I-490 from the City out towards the canal overpass.

Very cool stuff. Assuming I get the chance to take some "before" pics, I'll try to post them tonight.