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Weekly Financial Report
With Scott Roulston of Fairport Asset Management
Friday, April 5, 2002
Scott Roulston, CEO of Fairport Asset Management, discusses
the growing dispute between Mayor Campbell and the County Commissioners
over the Port Authority, the continue gloom in the market despite some
positive signs, and the tough times facing higher education in Ohio.
April Baer–Depending on whom you talked to
this week, it was either fairly promising or pretty crummy. The energy
industry has been hopping, but at the gas pump consumers could do little
but wring their hands and moan at the highest price increase per gallon
in fifty years. The Dow Jones Industrial Average will try to continue
its advances today on the broad market after finishing up 37 points Thursday.
The NASDAQ Composite and the S&P 500 also finished up slightly. Locally,
business on the waterfront seems to be on many people's minds. Scott Roulston
of Fairport Asset Management is with us to chat up the business news of
the week. Another good Friday morning to you, Scott.
Scott Roulston–Likewise, April. Ready to spring
forward this weekend.
AB–I know, I always forget to do that so it's
good we have the reminder. Big dispute that seems to be brewing at the
local level. Cuyahoga County Commissioners are lacing up their gloves
and appear to be ready to go toe-to-toe with Cleveland Mayor Jane Campbell
over (here we are again) another issue of regional control. This time
it's the Port Authority. The County would like to see more regional representation
in this area, but the Mayor, a former County Commissioner herself, says
that she wants to protect her power to appoint members. Question for you,
Scott. Is the current system and the current set-up of control over the
Port Authority serving the business community well?
SR–I think it's not only serving the business
community well, it's serving the region well. If we go back and look at
what the Port Authority is doing, it really allows funding on a countywide
basis for regional priorities. While (especially after Mike White) I think
business leaders really appreciate the new Mayor's style, her flip-flop
on this issue of control of the Port Authority does not bode well for
other regional issues, like the Convention Center and the Airport. The
Port Authority is a key development tool for the region. As a matter of
fact, there is a movement looking right now at expanding the role of the
Port Authority, so her flip-flop on this is really pouring cold water
on the whole idea. Everyone wants the Mayor to succeed, but I think on
this issue she and Council are dead wrong. It's upsetting because it appears
we are going back to this parochialism.
AB–Scott, I don't mean to pick nits with you,
but I have to go back to something we were talking about last week. Tech
stocks did not have a good time over the past five days in the market.
What was it you were saying last Friday about this being a good time to
get into the market? (Ha-ha)
SR–I think I was looking for some humble pie.
Well, you know we were looking for Tech stocks that looked appealing.
As a matter of fact, Michael Dell from Dell Computer just came out with
some news. I think that was one of the stocks we had mentioned, those
things looked fairly positive. But the market this week has really had
a cloud over it in all seriousness because of the Middle East. The investment
in the Middle East is really creating a cloud affecting oil prices, as
you alluded to. I mean, it's very disconcerting when they can't even agree
if suicide bombers are terrorists over there.
AB–Scott, there is something that is not directly
linked to business that I wanted to ask you about. It has to do with what's
going on in higher education. As I'm sure you've heard, Ohio's publicly
supported colleges have been having a very tough time lately. Budget cuts
in the rearview mirror and more on the way, as the State struggles to
deal with the lack of revenues. Ohio State's President, Rick Kerwin, has
announced he is calling it quits. He's been very frustrated over the lack
of funding from the government. Now yesterday one of our reporters produced
a story suggesting that universities should consider tapping the private
sector for the money that they need to attract really crackerjack researchers.
I want to just play a little sound for you. Here's Case Western Reserve's
Vice-President, Mark Katikia, talking about what might bring about some
growth:
"Research institutions can be a major engine to fuel
regional economic development. And not only regional economic development,
but national economic development. I think it is very important that the
research institutions do what they do best - and that is research and
teaching. And as a by-product of what we do best, regional economic development
happens."
So the question is, what should the business community's
role in this be? We've got the Growth Association, as part of its strategic
plan, talking about sending more money to provide endowed chairs and like
programs for higher education. Do you think that funding for higher Ed
is an idea that CEO's around here would be open to?
SR–I think they are already. Now, there are
a number of issues that you brought up. Rick Kerwin's departure at Ohio
State - everybody I talked to said he really had family ties back in Maryland.
And while the funding frustrated him, that was really a driving force.
But still, we are fortieth out of fifty states in the country in per capita
spending in higher education. We can't expect to have the growth that
we would like to have if we continue being at the low end of the spectrum.
It's not just spending more, too. Part of this process is getting rid
of some of the parts that aren't working very well. You brought up endowed
chairs. At Case Western Reserve right here we have a lot of endowed chairs.
I think what they are talking about is doing even more. But you look and
you see Timken and BF Goodrich, local entrepreneur Mal Mixon has endowed
a chair, so I think we need more of that. Part of what of we need to do
is change our image, too. Bill Sanford of Bio Enterprises said that our
biggest problem isn't really lack of start-ups and technology transfers.
We have an image problem as much as anything. These endowed chairs and
the superstars will come with a big price tag, but I think that will help
our image and help this technology transfer process.
AB–Scott, thanks so much.
SR–You're welcome. Have a good weekend.
AB–Scott Roulston joins us every Friday. He's
with Fairport Asset Management.
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