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Opinion Viewpoint

Over There

There is a story about a Jewish man who is shipwrecked on a tropical island. After a handful of years, he is finally rescued. But before leaving the island for good, the rescue officers request a tour of the structures he has built. They pass living quarters, a laundry, a kitchen, a gym, and even a little synagogue.

At the end of the complex, they come to another building that looks identical to the house of worship they just passed. So one officer asks the man about the building. He explains with a smile: “Oh, that’s the synagogue I don’t attend.”

This story speaks a great deal to the relationship of American Jews to Israel. For most, it is someplace they could live if they wanted to. But they choose not to — and yet still feel the need to preserve the choice.

In 1967, the Six Day War marked Israel’s stunning military victory over a number of its hostile Arab neighbors. While the Holocaust was still a fresh memory to the world, the victory was a remarkable public-relations coup. Israel would endure. Jerusalem was reunified. The new borders were deemed to be more defensible. Tourism and immigration boomed.

Young people would watch the film Exodus and tap into the idealism that would lead to making aliyah, or pilgrimage. Who can ever forget the final burial scene as the freedom fighters jump onto trucks and head toward battle? Perhaps, to one degree or another, every young American Jew has fantasized about volunteering in the Israeli army.

A Jew who opts to experience Israel finds an unparalleled sense of perspective about the role he or she might play in the continuation of a very lengthy saga.

As a college graduate in the mid-1970s, I made my way to Israel. I volunteered on a kibbutz in the Judean Hills. I once delivered a candy shipment to a massive military base, passing through a maze of beige uniforms and Quonset huts. It was my golden opportunity to “see if the shoe fits.” In my case, the truth is, it did not.

I had to come to grips with how much harder life was there compared to the material comforts back home. I also was made acutely aware by other international visitors how little love there is for America in the rest of the world. Curiously enough, my travels abroad actually galvanized my identity as an American.

Twenty years later, in 1994, before the intifada began, I returned to Israel for two weeks with my new bride. We found time amid our touring to visit the kibbutz. The factory had been closed after being sold to a food conglomerate. They turned the facilities into an adult daycare for the aging pioneers who had fled Europe from the Nazis. My sponsor from decades ago was recovering from a stroke there. Menachem’s memory was still sharp. While the video camera was running, I had the chutzpah to ask him if his life had turned out the way he thought it would.

In our society, there is a stigma attached to conflict and especially prolonged conflict without a visible end. Our daughter has entered her school years. We realize that there is a chance that she will never experience Israel in relatively peaceful times, as we did.

I still hear of local young Jewish adults flirting with the idea of service to Israel, but the times have clearly changed. What parents can encourage putting their child in harm’s way when other alternatives exist? Yet, because of ideological diversity within the Jewish community here, local responses to the current crisis will vary dramatically.

After the lessons of 9/11, we should be able to all agree on one thing — the haunting realization that it is pure folly to relegate these unrelenting conflicts to something that is merely happening “over there.”

Bill Steinberg is a certified financial planner at Kelman-Lazarov. His writing frequently appears in the Flyer.

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Opinion

Back To the Garden

In 1999, Dr. Joyce Jensen reluctantly walked away from a garden she lovingly tended for 14 years. Little did she know then that one of the last seeds she planted would blossom so well after she moved away.

Jensen’s garden is Richland Elementary School, an award-winning public school tucked away in East Memphis on Rich Road just east of White Station, where she served 29 years as principal. The seed she planted was the creation of the Richland Elementary Educational Fund (REEF), a volunteer parent organization wholly separate from the school’s more traditional Parent Teacher Association. REEF’s mission is to raise private funds earmarked to underwrite teacher development and curriculum-enrichment grants.

The idea was patterned after a successful fund-raising effort by parents at neighboring White Station High School.

Jensen, a grandmother with six grandchildren, pioneered the concept of placing a stamp on the back of student report cards, asking parents every six weeks to sign off on the number of volunteer hours they were willing to commit to at school or in their home. The procedure is still used at Richland today.

Her successor as principal, Kevin McCarthy, was also a believer in the REEF concept, even before the nonprofit group found its focus. He recognized the potential of having a pool of parents driven to foster the tradition of educational excellence at the school, especially in light of looming governmental funding constraints.

He nurtured the group through a period of uneven leadership, as the volunteers learned the fund-raising ropes on increasingly successful annual events such as spaghetti dinners and student talent shows. Eventually, the mix of motivated parents and teachers gelled into a cohesive force.

At the end of the last school year, McCarthy asked the group’s leadership for something above and beyond their community-building events. He challenged the group to raise the serious money ($10,000 to $20,000 annually) needed for curriculum enrichment. Specifically he wanted the funds necessary to hire extra reading assistants for the lower grades.

The diverse student population at Richland creates special challenges for teachers and administrators. Some children are ready to read when they start kindergarten; others, unfortunately, are not. The disparity creates a need to spend extra time with these students.

“The emphasis at the federal, state, and local level is to make sure all children are reading at grade level or above when they exit third grade,” McCarthy says.

And that’s where this story comes full circle. In a brainstorming session, the board members of REEF came up with the idea of honoring former principal Jensen by naming the “curriculum enrichment” fund-raising drive in her honor.

The project has rapidly taken on a life of its own. There is now talk of planning a Richland Elementary community reunion for former students, teachers, and their families.

Through all the mid-summer planning commotion, Jensen remains modest and self-deprecating about her renewed status as a dusted-off “community institution.”

“That’s what happens when you’ve been around a long time,” she laughs.

But the comment also strikes a more serious chord.

“I never got tired of the routine. It was hard to leave,” she says. “The first day of school always brings a feeling of sadness over me now.”

But Jensen remains a genuine fan of the school’s achievements during the first three years of Principal McCarthy’s administration.

“Kevin [McCarthy] understands that if you empower everyone, and they feel that it’s their school, good things start to happen.”

And so the garden grows.

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Politics Politics Feature

Hey, GOOBer

Financial planners often bring valuable prior professional experience to their practices. Take my colleague Morton Gorden, for instance. He has a wealth of information based on his experience in retail merchandising. He is the descendant of an enterprising Jewish immigrant from Russia named Harry Gorden, who settled in Coffeeville, Mississippi, and opened a successful general store in 1912.

Harry’s son Aaron — Morton’s father — later joined the venture and the store burgeoned into a furniture and appliance business.

In 1957, at the tender age of 10, Morton was unleashed onto the sales floor on Saturdays. He took over the business from his father in 1979. As the nature of retailing irrevocably changed, Morton closed the Coffeeville business for good in 1989. It was a bittersweet transition, but after 77 years of operation, “H. Gorden’s” became a memory.

Through the years, the now 50-something Gorden has helped a number of friends, family members, and clients to close businesses. Gorden, who also serves as an arbiter for the Better Business Bureau, contends that many of these “going out of business” (GOOB) sales offer legitimate values to the public. But, he warns, abuses are commonplace. In Tennessee, the law requires that once a business starts a GOOB sale, the business must terminate within 90 days. (Some local municipalities allow 120 days with a special permit.) Further, the business operators may not purchase new merchandise once the sale has started. But creative operators sometimes place orders in advance for merchandise that is scheduled to arrive during the sale.

Consignment arrangements for merchandise not owned directly by the business are also employed. Such agreements provide the business with a risk-free opportunity to make additional profit because any unsold inventory may be returned to the consignor.

Because retailers often don’t know all the aspects of putting on a GOOB sale, external promoters are typically hired to plan and operate the event. These promoters may be hired as contract employees, who are entitled to a percentage of event sales, or paid a flat amount.

Or the promoter may purchase the entire inventory of a business at a negotiated price in advance. From that point on the original business owner is out of the picture. Often with this type of arrangement other inventory is brought in for the sales event to enhance the bottom line. In either case, the promoter uses the good name of the business to lure customers who believe they can profit from someone else’s misfortune.

Gorden stresses that these sales can be very lucrative for the businesses. The best-case scenario is one that yields both reasonable mark-ups for the business and better-than-average values for the consumers. He cites four types of common abuses.

Original prices are often repriced upward just before the sale. A $299 piece of jewelry is marked at $399, with a sale price of $279. The intent is to misrepresent the discount the customer is actually receiving.

Closeout merchandise that bears a higher original mark-up is brought in specifically for the sale. Retailers can often buy discontinued merchandise at up to a 50 percent discount. This tactic is considered ethical so long as the closeout merchandise falls within the range and quality the business typically retails.

The combination of strong customer response and healthy mark-ups can entice some businesses to continue their sale longer than the statutory limits. A recent example of an illegal GOOB sale practice involved Upton’s Department Store in Memphis being cited by the state for conducting its GOOB sale for 145 days. A $15,000 fine (plus various costs and penalties) was imposed under a settlement agreement with the state.

Misleading advertising is used to get people in the store. “Entire Stock Up To 50% Off” is an example of advertising that attempts to make the public believe that virtually all the prices have been cut in half. In reality, there could be very few half-off items available, with most sale items bearing lesser discounts. Although not illegal, it’s certainly ethically questionable.

Just remember: Not all going out of business sales are created equal. Let the buyer beware.

Bill Steinberg is a Certified Financial Planner and Mediator with Kelman-Lazarov, Inc. He can be reached at bill@kelman-lazarov.com.

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Opinion Viewpoint

A Tale Of Self-Absorption

My apologies to the spokespersons for liquid dietary supplements and all the local radio deejays who sing the praises of herbal diet pills. This is not an article about shortcuts in the weight-loss process as much as it is a caution to avoid the potentially fraudulent marketing pitches that permeate the diet industry.

One year ago in February I visited my physician for treatment of a minor infection. Part of the office visit routine involved the ritual weigh-in. To my dismay, I tipped the scales at a personal all-time high. I anxiously asked the doctor about the new generation of weight-loss drugs.

He told me that his experience was that people who lost weight on the medications invariably put the weight back on, and sometimes even gained more poundage after ending the prescription treatment. Some things just had to be done the good old-fashioned way, he said.

Driving home, I was embarrassed that I still had asked for a magic pill, even though I knew there was no such thing.

People don’t decide to change in a vacuum. It is our interaction with others that can have resonating effects. My experience was no different. My wife’s respectful attitude had always been that I would lose weight only when I decided the time was right. She had the wisdom not to hound me, but she’d been right. I also wanted to set a better example for my young daughter.

I took it all as a call to get back to basics. In a world where we cannot control all we might care to, it made sense to focus on the goals that are within reach. After all, at 40-something, I was essentially beginning the second half of my life.

Mine would be an “existential” diet, built on choices. It had taken a long time to put on the extra weight, so it was reasonable to assume that it would take a long time to get it off. I began restricting my fat intake and started to count calories. My target was 1,500 per day, with enough flexibility to max out at 2,000.

The key was always having the right kinds of food within easy reach. Portion-controlled foods are generally more expensive than bulk items, but I was willing to pay a premium for convenience and certainty. Ironically, as a family we actually spent more on food. The cost per pound of protein — often $8 to $10 a pound, including prepared and portioned soy products — is generally much higher than typical carbohydrates and fatty foods. The unexpected bargain was switching to the convenience of inexpensive instant oatmeal packets in the morning.

After taking on the sweaty rigors of yardwork to aid in burning calories, I started to average a two-pound-per-week weight loss. I never experienced extreme hunger, and with the better food choices, I never felt deprived. I marveled at how efficiently my body processed the portioned amounts of food. I was never one to weigh myself daily, but I could see the changes in my body shape emerge, initially in my face.

In fact, it wasn’t long before the neighborhood pizza delivery franchise sent me a note saying they missed our business, along with some attractive coupons.

As my weight slowly dropped my large-size wardrobe became totally useless to me. The joy of being back into a normal size range was tempered somewhat by the expense of having to put together a transition wardrobe. It’s particularly hard to make that investment when you have not yet reached your final size and the new clothes that you are buying, to some extent, are only temporary.

When the morphing process became more apparent, people invariably asked what prescription drug I was taking, or whether or not I was a disciple of the Suzanne Somers, Pritikin, or Weight Watchers programs. (One person even asked me if I was experiencing an illness.) It is, however, intriguing how so many people who haven’t seen me in a while have all said the same thing: “You’re a shadow of your former self.”

People respect weight loss. But trying to tell folks that you have undertaken a “lifestyle change” doesn’t have much sizzle or impact. This January, when the media turned its focus to post-holiday dieting, an article on the USA Today Web site coined the term “CRE” — chronically restrained eating. New research indicated that the only people who lost weight and kept it off were practitioners of CRE. Finally I had found an explanatory term to satisfy curious inquirers.

Not a day goes by that I don’t think about food choices and the amount I eat. I eliminate most of the poor choices and my body has relearned the sense of fullness that non-obese people enjoy. Food tastes better because I have learned to savor the flavors.

The toughest unexpected challenge is being around people who are not yet ready to deal with their weight situation. I let them know that their food choices are a completely neutral event to me and refrain from talking about my weight loss unless they bring up the subject. Then I share my conviction that they will only take action when the time is right for them.

Last month, almost one year since my turning-point visit to his office, I went to see my doctor again. It was both amusing and satisfying to witness his double-take at my 70-pound weight loss. He was genuinely touched when I gave him credit for triggering my decision to make a change. I don’t think that it occurred to him that his words would have such a profound impact upon my life.

Finally, I thanked him for his wisdom in not writing me a prescription for a magic pill.

William Steinberg is a certified financial planner for Kelman-Lazarov. You can e-mail him at bill@kelman-lazarov.com.

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News News Feature

MORE DELAYS FOR MEMPHIS NETWORX

The fate of Memphis Networx has shifted from Memphis to Nashville and the Tennessee Regulatory Authority (TRA), as Time Warner Communications backed off a bit in its opposition to the proposal Tuesday.

More delay seems likely, as the telecommunications venture seeks dual approvals of the Memphis City Council and the TRA.

“I don’t think it’s going to be a rubber-stamp process,” Time Warner attorney John Farris said of the TRA approval.

Farris told a council committee that Time Warner “will be taking a much lower key, advisory role concerning the franchise requests and TRA certifications.” Time Warner is close to completing a merger with AOL and has its own problems regarding cable access for competitors.

Memphis Networx, a joint venture of Memphis Light, Gas and Water and private investors, wants to build a broadband fiber-optic cable network in Memphis. Proponents say it will give Memphis a boost over other cities, but Bill Ray, BellSouth regional director for West Tennessee, questioned that assumption.

“I know of no company that has not come to this community because of communications,” Ray told the committee hearing. “We beat Nashville three-fold last year in economic development.”

Council member TaJuan Stout Mitchell and others questioned the amount of minority and female participation in the investment side of Memphis Networx. The full council was scheduled to address the franchise question Tuesday afternoon.

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News

Pepper Rodgers Finally Gets Chance in NFL

Five months after he moved to Washington D.C., Pepper Rodgers landed the job he dreamed about in Memphis for 17 years.

“Just think, I’ve been up here five months and now I’m the vice-president,” Rodgers said with a laugh on Monday.

Earlier, Rodgers was named vice president of football operations for the Washington Redskins by his new pal, Redskins owner Daniel Snyder, who, at 37, is almost 30 years his junior. In the newly created position, Rodgers will help select a head coach for the Redskins, who fired Norv Turner and named passing game coordinator Terry Robiskie to replace him for the rest of the season.

The surprise announcement vaults Rodgers into the ranks of NFL bigwigs after trying for 15 years to get an NFL team for Memphis by virtually every means possible. He coached the Memphis Showboats in the rival USFL for two years. After that league folded, he worked with FedEx founder Fred Smith to bring an NFL expansion team to Memphis. When the NFL snubbed Memphis, he coached the Memphis MadDogs of the Canadian Football League for one year before that team folded. When the Houston Oilers left Texas, Rodgers worked for owner Bud Adams for the team’s one year in Memphis and its first year in Nashville, until the Oilers became the Tennessee Titans.

Always the odd man out, Rodgers football career seemed at an end last year when the Titans moved into a new stadium and went to the Super Bowl, erasing the bad memories of that awful year in Memphis. Searching for excitement and something to do, he made an aborted, ill-advised run for mayor of Memphis in 1999, getting under 200 votes.

The man who had been a head coach in college at Kansas, UCLA, and Georgia Tech and a coach in two professional leagues seemed destined to be, at the end, just a fan. On weekends at his condo overlooking the Mississippi River, he would watch game after game in which old colleagues, assistant coaches, and rivals took the spotlight. Steve Spurrier, Terry Donahue, Jim Mora, Jeff Fisher, Bobby Bowden . . . football men were rarely more than two degrees of separation from Pepper Rodgers.

Then his personal story took maybe the strangest twist of all in a 50-year career that began in Atlanta where Rodgers played quarterback and placekicker for undefeated Georgia Tech and was named most valuable player in the 1954 Sugar Bowl. The Redskins built a new stadium. The naming rights went up for bid. Memphis-based FedEx, led by Smith, put in the winning bid of $205 million.

With the naming rights went two skyboxes at FedEx Field, one for customers and one for politicos and big shots. Smith asked “The Coach,” as he calls him, to help him and his marketing staff entertain the guests. Rodgers at first planned to keep his home in Memphis and live in Washington part-time. Then he hit it off with Snyder, the young owner determined to spend his way to a championship.

He became Snyder’s link to FedEx and, more important, to football players and coaches, both with the Redskins and around the league. He sat in Snyder’s box and was seen on national television on ABC’s Monday Night Football. He and his wife attended basketball games with Snyder and players Deion Sanders and Stephen Davis and their wives. The old coach became the young owner’s football confidant.

Few people realized just how close they were. When Turner was fired, Snyder first wanted to hire Rodgers as interim head coach, according to reports in The Washington Post. Rodgers, who was not in the meetings himself but was up until 3 a.m., said Monday he much prefers his new position.

“I’m in the football business and I got a good position and I’m with the Washington Redskins. What more could I want? When I grew up Atlanta, the Redskins and Georgia Tech were my teams.”

In his new job, the coach and the player personnel director will report to him. He will influence player, coaching, and drafting decisions.

For the first time since the NFL expansion debacle, Rodgers was back in the limelight Monday, speaking at a press conference to dozens of reporters and accepting congratulations from players.

“I’m going to be in meetings with players and coaches,” he said. “I’m basically someone who tries to help the owner make decisions.”

The biggest one, of course, is who will coach the Washington Redskins. Incredibly, it was almost Pepper Rodgers. Just as incredibly, Pepper Rodgers gets to help make the choice.

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News News Feature

AS THE NASDAQ TUMBLES

(EDITOR’S NOTE: WITH THE NASDAQ AND ESPECIALLY TECH STOCKS TAKING SUCH A DRAMATIC DIP, WE THOUGHT THIS ARTICLE FROM BILL STEINBERG WOULD MAKE A TIMELY REPRINT. IT IS FROM THE MARCH 22, 2000 ISSUE.)

It usually happens on Monday morning. A client calls me to discuss an investment idea he has heard about over the weekend. A friend had shared a selective memory of his latest Internet stock, bragging how he more than doubled his money in a short period. “Bill, shouldn’t we reconsider buying some of that compelling Internet stock for our account?”

Investing in individual Internet stocks is an unnecessary risk that most investors should avoid. But that’s not what the client wants to hear. Apparently it’s not what the world wants to hear either.

The financial planning process can be boring when compared to the thrills and spills of day trading. I remind my client of recent stories of day trading gone awry. How one ruined, vindictive man walked into his investment firm in Atlanta and opened fire on everyone, eventually killing himself. And how another initially successful day trader gave up his career in Chicago to pursue stock trading full time. When his fortunes finally turned he was totally wiped out. He decided to push his wife down a ladder in hopes of collecting on her $500,000 insurance policy. When the fall didn’t kill her, he attempted to strangle her until the police arrive.

The client I’m talking to knows the specific reasons why he and his wife are investing and how much they need to reach certain financial goals. My job is to help them achieve their goals with a slate of investments that aspires to capture the greatest possible return commensurate with their pre-determined risk tolerance.

The primary lesson about the volatility that accompanies high-risk investments cannot be repeated often enough: In seeking extraordinarily high returns you must be willing to expose yourself to a large and often untimely amount of risk. Being in the wrong place at the wrong time, you can lose your shirt — and possibly more.

Remember the iceberg in the Titanic saga? It’s common knowledge that the majority of the mass of an iceberg is submerged under the sea. It’s only the tip that can be seen by the naked eye at a distance.

The only people who should trade Internet stocks, or any individual stocks for that matter, are the ones who are only using the “tip of the iceberg” of their aggregate net worth. Under the surface, all the financial goals of these wealthy individuals have been secured, out of harm’s way. They are, in effect, choosing to speculate with money they can afford to lose.

But what about the rest of us? For a number of reasons, mutual funds with technology company exposure are a better alternative to handle this risky business. A technology or Internet mutual fund will hold a position in hundreds of stocks at any given moment. These stocks are selected by a professional portfolio manager who lives and breathes the technology sector. That person is likely backed up by the mutual fund company’s internal research department who helps the portfolio manager decipher buy and sell signals.

The diversification of holdings achieved within the fund lowers the risk to some degree. Think of it as an elevator suspended by many cables instead of just one.

Individual Internet stocks, particularly of those companies like Amazon.com, which have yet to turn a profit, are extremely difficult to understand in terms of whether the current market price is over- or under-valued. Watching the classic models of stock valuation, based upon dividends and earnings, fall by the wayside is unsettling. Even the average holding periods for certain actively traded Internet stocks like AOL dropped to well below one month. At every turn, it seems investors are being challenged to prove that they can discriminate between speculation and investment.

Another point of consideration concerns the sought-after initial public offerings (IPOs) of start-up Internet companies. These “hot issues,” offered only by prospectus, are nearly impossible for smaller investors to purchase in significant amounts. The mutual fund companies, by virtue of their huge purchasing power, are treated as institutional investors by the underwriting syndicate. They merit sizable allocations of these hot performing stocks which, in turn, helps to boost the fund performance that their shareholders enjoy during good markets.

Purchasing individual IPOs can be risky. Some issues drop in value immediately. Even those that soar after they begin to trade publicly on the secondary markets can subsequently drop precipitously in value.

Take, for instance, VA Linux Systems, which went public at $30 per share on December 9, 1999. Midday the share price rose as high as $320. By the end of the first day of trading, the shares closed at $239.25, up a record 690 percent. In the months that followed, the VA Linux shares have steadily declined to a price currently hovering around $105.

For all the profits that were taken, there were thousands of unlucky people who bought in too high, didn’t sell rapidly enough, or went “bottom fishing” too soon.

When a client calls to discuss a particular Internet stock, the outcome has always been the same — the spur of the moment idea is dropped. My client either opts to purchase additional shares of technology mutual funds they already own or venture into other mutual funds with an even more focused Internet company exposure. Sometimes they choose to do nothing.

In the process, we share a few laughs about the nature of greed, while reiterating the profound, real-life reasons why people invest. Most importantly, the discipline of limiting their aggregate technology stock exposure to a minority portion of their overall investment portfolio is never violated.

William I. Steinberg, CFP, is a registered representative with Financial Network Investment Corporation, Member SIPC. You can e-mail him at letters@memphisflyer.com.