Tuesday. October 31, 2000
The University Daily Kansan
Section A · Page 3
Students waiting out stock market plunge
Bv J.D. McKee
writer@kansan.com
Kantan staff writer
Dow Jones Industrial Average
Wall Street investors aren't the only ones who have been hit by the recent plunge in the stock market.
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Source: http://msn.moneycentral.com
Some students who have invested in technology stocks also have experienced losses.
Todd Peters, Wichita senior, has invested in the market for the past three and a half years. When he started, he said he invested in technology stocks because they had the most potential.
Kyle Ramsey/KAHSAN
"If you get good research, it's potentially a good bet," he said.
But the Nasdaq composite, which charts technology stocks, has dropped more than 500 points in the past month.
Peters said the stock had stayed close to the same price he paid for it until about a month ago, when it dropped to about half that price.
"It shocked me when it happened, but I've seen that kind of thing happen before," Peters said. "I haven't lost a lot in the long run."
"When it goes down, it's a chance to make more money," he said. "It might be time to take a chance."
Willy Chen, Topeka sophomore, also has lost money recently, but like Peters, he isn't scared away by falling prices.
Peters said the drop in stock prices also could have positive results.
"When you lose money, it forces you to stay in the market until the price goes back up." Chen said.
Chen invested in technology
companies such as America Online. He said the price had fallen 25 to 30 percent in the past month.
"It's a simple correction in the market," he said. "It'll rebound next year."
Although he has come out about even overall in the market, Chen said he had lost about $2,000 in the past few weeks.
Paul Koch, professor of business, said a drop in the market was inevitable.
"By all traditional measures, the market was extremely high," he said. "We should have expected some correction."
Roch advised students to consider long-term potential rather than short-term benefits because the stock market would outperform the time frame.
Koch said the technology market had been on a roll lately and a lot of that momentum was based on very optimistic forecasts, but many of the expectations were overly opportunistic.
"What we're seeing now is a bloodbath," he said.
Although the performance of the tech stocks has been volatile, Koch said, other parts of the economy have not been hit by this correction in the market.
Koch said older companies with more solid business histories had continued to thrive. He said people continued to buy those companies at higher prices because there was a new focus on companies with more stable outlooks for the future.
Ryan Gerstner, Frankfor senior, has been investing in such a company. He said he invested in Philip Morris because of its low price.
He said the price of the stock had continued to rise in the past month while tech stocks had been falling. During the past couple of months, Gersner said he had made about $700 to $800.
"At the time, the dividend was incredible because the price was beaten down because of all the lawsuits," Gerstner said. "It was risky to other investors, but I knew it would rebound."
- Edited by Casey Franklin
Association invests long-term
By Jason Kraall
writer@kansan.com
Kanson staff writer
The KU Endowment Association does not plan to adjust investments to make up for falling stock prices in recent weeks, a representative said Thursday.
John Scarffe, director of communications for the association, said that based on past experience, the association did not expect long-term investments, such as endowed funds, to be affected by record losses in high-tech stocks in the past two weeks. That's because endowed funds are invested for a five-year period, giving them enough time to make up for losses such as last week's before their return comes in, he said.
"We pay attention to the market on a day-to-day basis, but the investment philosophy of the Endowment Association is to have long-term investments that are diversified." Scarffe said. "We watch the five-year cycle as opposed to the day-to-day market."
As of June 30, the association managed about $699 million in long-term, endowed funds. An additional $110 million lies in short-term investments, which can be withdrawn at the University's request at any time. But that money is invested primarily in fixed-income investments such as bonds that are not subject to the volatility of the stock market, Scarffe said.
Diversification means investing funds in a variety of ways to avoid taking big losses, such as those investors experienced when the Dow Jones Industrial Average and the S&P 500 hit their lowest points of the year two weeks ago.
The Endowment Association Board of Trustees, made up of KU alumni, requires that 15 percent of the association's endowed funds are invested in international stocks, an additional 45 percent in domestic stocks and 10 per cent in treasury bonds. The remaining 30 percent can be invested as fund managers see fit, Scarffe said.
"We pay attention to the market on a day-to-day basis, but the investment philosophy of the Endowment Association is to have long-term investments that are diversified."
John Scarffe KU Endowment Association
"We have one manager who has 50 percent in stocks and 50 percent in bonds," he said. "Another manager has 25 percent in one and 75 percent in the other."
Paul Koch, professor of business, said because high-tech stocks in areas such as biotechnology, fiber optics, personal computers and wireless phones had fallen this month, many investors had moved their money into more stable sectors.
"In the last couple of weeks, we've seen a bloodbath in the technology stocks," Koch said. "But we've seen some people taking their money out of that sector and into stocks with a history of more stable earnings."
— Edited by Shawn Hutchinson
That includes investing in markets in Europe, Asia and Latin America, especially when the U.S. market is as volatile as it is now, Koch said.
"U.S. stock has done so well for so long, it's at least possible that the time has come for the U.S. stock market to underperform other markets in the world," Koch said.
Pumpkin painting
Smashing pumpkins only sign of tricks most years on Halloween, officer says
Stephanie Couch, Blue Springs, Mo., junior, helps Olivia Lenus paint a pumpkin at a Theta Chi/Alpha Gamma Delta Halloween party for the benefit of Big Brothers and Big Sisters of Lawrence. Sunday's party consisted of face painting, pumpkin painting, cookie decorating and many Halloween-themed games at the Alpha Gamma Delta house. Photo by Ashley Bonebrake/KANSAN
By Rob Pazell
By Rob Fuzell
writer@kansan.com
Kansan staff writer
KU Public Safety Officers treat Halloween as any other working day, said Sgt. Troy Mailen.
Even though one serious incident has occurred in the past, Mailen said Halloween was generally quiet on the KU campus aside from smashed pumpkins.
"You'll see pumpkin remains and that kind of thing," Mailen said. "But as far as academic buildings go, there really isn't much going on."
Mailen cited an incident from a couple of years ago when the popular movie Scream came out during which a group of pranksters dressed as the Scream villain and visited sororities.
"The majority of it were pranks,"
Mailen said. "The girls were concerned for their well-being, and the hype of the Scream movie intensified it."
Mailen said the Scream pranks did not single out a particular location and lasted more than several days, but it didn't become a problem until crimes were committed.
"It took a bad turn when someone actually did enter a sorority house and made off with some property," Mailen said. "Criminal charges were probably not the intended result of their joke."
Julie Geiger, Leavenworth senior, lived in the Alpha Delta Pi sorority that year and remembers the incidents. She said the pranksters would come to the basement windows and look in, which made members of her house
fear going outside.
"There's usually a lot of people around our neighborhood on Halloween, so it wasn't a big deal," Geiger said. "But it made it kinda scary to go out in the parking lots."
Mailen said even though more officers weren't on duty Halloween night, the officers were told to play close attention to what was happening around town, much as when a rival athletic team visits.
"It's just like when KU and KState play." Mailen said. "We tell the officers to keep an eye out and heighten awareness."
Mailen said students should be aware that what could be a joke could also be construed as serious to the victim. He also stressed that in the nature of Halloween, students should use the buddy system when walking at night.
Edited by Warisa Chulindra
Highland melody
Martha Robinson,
graduate student
and instructor
from Tucson,
Ariz., blows echoing notes from
her bagpipe yesterday
while overlooking
Potter Lake.
Robinson has played the pipes
for more than 10
years. Photo by
Thad Allender/
KANSAN