Lines out of the Parking Lot

Everyone always marvels at the sight of long lines to vote in newly democratic nations. Well this year we have a wealthy yuppie version of that here in Johnson County.

I live near the Johnson County Election office, one of only a few places you can vote early in the county. During the primary election I didn't really notice a lot of additional traffic there until the last couple of days. A couple of weeks ago I noticed more and more people coming and then about a week ago I noticed that their front parking lot, and large side parking lot were full, almost all day. For the past three days there have been lines of cars flowing back to the street, and yesterday there was a line down the street for about half a block waiting to even get into the parking lot. Lines to vote in Johnson County, wow! I have never had to wait behind more than one person since I started voting in 1996.

That is a lot of interest in early voting, I don't know if that will result in a high overall voter turnout, or if people will just vote early as a substitute for voting on election day, but it is definitely a sign that a lot of people are ready to be done with this election.

Timothy Burger

Detour

Let me take a step back from politics for a minute, even though it is only three days from election day.

I keep a pretty decent eye on the stock market. I really started learning about investing in 1999. When I wasn't in class I would watch CNBC and at that time everything went in one direction, and that was up. People made millions. People who knew nothing about investing quit their jobs and became instant gurus. I sat home, a poor college student, confused. I just didn't get it, why were these stocks going through the roof? Sure, times were good and companies were making more money, but not enough to justify the crazy prices their stocks traded at.

The internet companies everyone loved did stuff for free, they measured success by page views, by click-through, they didn't need earnings, or a Price/Earnings ratio because this was a new wave, and things were different, and those of you who didn't get it were going to be left behind.

I tried to read about it, I tried to learn, and then by 2001 I had figured it out, I wasn't crazy, the people buying those stocks were. As we all know, things weren't different, and people lost a lot of money buying stocks with phantom earnings and crazy P/E ratios.

That brings me to my current confusion, Google. Now don't get me wrong, I love Google and Google loves me. I uses Google dozens of times a day, I think it is the most useful thing I have ever seen on the internet, a great company run by great people.

That being said, I think the price of Google stock is kind of crazy. As I write this the price is a little over $195 per share, with a Price/Earnings ratio of about 235, to put that in context, the S&P 500 has an average P/E ratio of 19 or 1/12th of Google. As far as I can tell this is driven by wishful thinking by investors, and not hype from Google management.

Google is a great, fast growing company with great product, but it also competes against the best and the brightest and I have a hard time believing that it will be able to show the kind of growth it has in the past year for very long. Google competes primarily with Microsoft and Yahoo. Powerful competitors whose stocks trade at P/E ratios of 95 and 35 respectively. Both of these companies are working full time to improve their search capabilities (Google's core competency) and Microsoft already has a major presence on 95% of the computers in the world and Yahoo has an extremely robust content presence to complement its search capabilities.

I would recommend shorting Google, but I know the risks of recommending shorting a stock that is rising as quickly as Google. I also know how much money you can make on a short when a stock peaks and then falls rapidly (as Google stock may).

Timothy Burger

Fundraising?

Dennis Moore has raised almost twice as much money as Kris Kobach. Kobach claims that they are going to make a huge push to win over undecided voters in the last week of the campaign. Kobach is out raising money from supporters to fund that, making this even more confusing for me:

"Campaign records show that Kobach has recouped about $18,000 of the $51,000 he borrowed privately to help out his congressional campaign. He also has repaid himself $11,000 for contributions he gave to the campaign before the primary.

“I don't know whether I am going to win or lose, but regardless, I don't want to mortgage my family … just in the pursuit of political office,” said Kobach, noting that he is on leave from his job as a law professor." KC Star 10-27-04

How do you ask people to donate to your campaign while you are taking back your contributions in case you lose?

Timothy Burger

The Bush (Manufacturing?) Economy

Despite the well publicized death of American manufacturing, the numbers don't lie.

"manufacturing output is measured by the Federal Reserve as part of its broader gauge of industrial production, based on an index in which 1997 equals 100. The index hit a high of 118.4 in June 2000 and then went as low as 110.3 in December 2001. It has risen since the middle of last year, hitting 118.7 in September. What this means is that manufacturers are once again producing as much as they did at the peak of the boom." Wall Street Journal October 25, 2004

But it gets better, one of the main factors driving manufacturing growth is exports "Total exports were growing at about a 14% annual rate during the second half of 2003 but have slowed to a little over 7% during the first half of this year."

While we all know that fewer people work in manufacturing, the fact is that the US is manufacturing more than it ever has. The reason for both is simple, increased productivity, driven by technology and efficiency. American workers are the most productive workers in the world.

American manufacturing can compete successfully with the best around the world, especially in high value added products. Despite what John Kerry and other protectionists (yes, that is a fair tag for Kerry) would tell you, the United States is not being hollowed out, or sold out to other nations. The world is a tough place, but our guys are doing well, although you would never know that by watching the evening news or a Democrat campaign ad. Even more important, this data shows that if we turn our back on the global economy (even if we do it in the name of jobs, labor or environmental standards), the result would be a disaster for the US.

Timothy Burger

T-Minus 8 Days

On Monday morning we will be eight days away from knowing who has won the 2004 elections. While the Bush-Kerry race is by far the most important, in Kansas we will have virtually no impact and more and more it seems like Bush will do well in Missouri, so I would like to spend some time over the next few days focusing on some of our local races that are still up in the air.

The five that interest me the most are the Kobach-Moore race in the Kansas Third Congressional District, Bi-State II, Blunt-Claire! (MO-Governor), Patterson-Cleaver (MO-5) and Ryun-Boyda (KS-2).

Over the next few days I hope to write about all of these, but the Kobach vs. Moore race is the one that interests me the most. The KC Star released poll numbers today that make it look like Moore will clean up. Moore has a significantly larger lead at this point than he had over either Adam Taff or Phill Kline, Moore has millions of dollars in ad time that has not run yet, the endorsements of the Kansas City Star and the Johnson County Sun, a reasonable following among Republicans and Moore has an established reputation in Kansas that will be difficult for Team Kobach to change in the next eight days.

But Kobach has a Republican (by registration, but not always by votes) district, a driven campaign staff, a natural grass roots organization that can operate without a lot of funding, a decent amount of money in the bank, a stealthy campaign truck, and should get good support from the NRCC (including a new ad I saw this evening for the first time).

I need to give Kobach credit, he surprised me in August, in fact he surprised a lot of people when he beat Adam Taff. I supported Taff, and Taff had a lot of the advantages Moore now has, but Kobach pulled out a win. He beat Taff by going negative (using charges that were generally unfounded and misleading), bringing a strong conservative message, and registering new voters. The new voters were the key in the primary, since pollsters try to qualify who is a "likely voter" they generally disqualify people who have not voted in the past couple of elections, so newly registered voters are kind of stealth voters regarding polling.

Kobach has been on the attack for a long time and hitting hard, in the end we will see if his message pushes voters away from Moore, or if it pushes moderate Republicans into the arms of a Democrat. Regardless, November 2nd is going to be interesting.

Timothy Burger