[Vision2020] Wal-Mart cause and effect

[Barrett Schroeder]

Following up on Jeff Harkins' post on stock holdings of
PERSI and CREF, here is some more information about 
the amount of money in public retirement funds, which
may be of interest, but not directly related to Wal-Mart.


The largest public pension is the California Public Employee 
Retirement System (CalPERS) with $195 Billion serving 1.4 
million members.

Another of the largest is the California State Teachers' Retirement
System (CalSTRS) with $128 Billion serving 755,000 members.

New York and New Jersey are also very large, and other states will
have similar funds in rough proportion to their population or number 
of public employees. 

The Census Bureau puts the holdings of the 100 largest public 
pensions at around $2.5 Trillion.  Just for comparison, a controlling 
interest in Wal-Mart would cost around $100 Billion.


You can compare this to roughly $8 Trillion total in the US mutual fund
industry, representing a much larger number of clients. The biggest 
mutual fund companies are Fidelity with $1.1 Trillion for around 19 million 
clients/accounts, and Vanguard with $850 Billion for about 18 million 
clients/accounts.  


There is a perception that large corporations are owned by a small
group of very rich people. But public pensions represent a huge amount
of money that is invested on behalf of regular working people and the
profits enable these people's retirements.

Some of them, such as CalPERS, are large enough that they have a
lot of influence in how corporations are run (Corporate Governance).

Here is a link to an interesting interview, from April 2004, with the then-
President of CalPERS on a number of issues related to corporate governance.
(This is a very long link, and it needs to be on one line to work. The
article
also has a lot of ads)

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2004/04/25
/BUG7J67MQD1.DTL


University endowments also have a lot of money to invest.
The University of California Endowment is $64 billion. 
The Harvard University Endowment is $26 billion (the largest 
private university endowment, I believe).


Jeff would probably have some insight on the taxes these different 
entities pay (beyond the corporate income taxes paid by the companies
themselves).  An individual can invest a limited amount in a tax-deferred
IRA or a tax-free Roth IRA.  I would guess that public employee retirement 
systems and university endowments would have tax advantages that allow 
them to grow faster than a private mutual fund.


Another note, Tom Trail recently posted that Idaho's system 
(PERSI) is 93.2% funded, a measure of the system's health.
This compares very well to CalPERS which was 84.1% funded 
for the "State" category, and 92.7% funded for their "School" 
category as of June 2004, the last number I found on their site.


Note: the numbers I'm using here are from multiple sources, 
generally from 2004 and 2005, but the numbers change 
every day.  Here are some links for more information:

California Public Employee Retirement System
http://www.calpers.ca.gov/index.jsp?bc=/about/facts/home.xml

California State Teachers' Retirement System
http://www.calstrs.com/investments/Invport.aspx

U.S. Census Bureau - Public Employee Retirement Systems
http://www.census.gov/govs/www/qpr.html
http://ftp2.census.gov/govs/qpr/table1.txt

University of California Endowment
http://www.ucop.edu/treasurer/

Harvard University Endowment
http://www.hno.harvard.edu/guide/finance/



Barrett Schroeder


	-----Original Message-----
	From:	Jeff Harkins [SMTP:jeffh at moscow.com]
	Sent:	Thursday, November 17, 2005 12:01 AM
	To:	vision2020 at moscow.com
	Subject:	Re: [Vision2020] Wal-Mart cause and effect

	Moving on to consider other salient points related to the impact of
an expanded Walmart store in Moscow, there are secondary and tertiary
effects for all of you to ponder.
	
	With so many university level educators in Moscow, it may be
important for you to consider your retirement portfolio.  Like many of you,
I have a CREF account.
	
	I just looked over the 2005 Schedule of Investments for CREF.  You
might find the following sample of their holdings interesting:
	
	Avista                    2,900 shares    $      54,000
	Applebee's               5,687 shares    $    151,000
	Blockbuster              12,560 shares   $    115,000
	Carmike Cinemas         8,40 shares      $      26,000
	Loews                     52,085 shares   $   3,032,000
	McDonalds                85,243 shares   $   2,365,000
	Office Depot             21,101 shares   $      482,000
	Papa Johns               575 shares       $      23,000
	Sears Holding            6,680 shares    $  1,001,000
	Staples          49,538 shares   $  1,056,000
	Starbucks                26,215 shares   $   1,345,000
	WalMart          169,404           $  8,165,000
	Wells Fargo              113,490           $  6,989,000
	
	With the exception of Loews (perhaps a soon to be neighbor), all of
these firms have invested in Moscow and many of you have in turn invested in
them through your retirement portfolio.  You will receive retirement
earnings as a result of that symbiotic relationship. Please note the scale
difference for the WalMart holdings.
	
	CREF offers numerous other funds (and of course there are thousands
of other mutual funds). Because WalMart is a bellweather stock, there are
not many funds that don't hold some WalMart.
	
	It is even better for you if you are an investor and have some of
these holdings in your personal portfolios - you are now a local business
owner - and each time you frequent those establishments, you get "cash-back"
through your dividend earnings and capital gains from increases in stock
value.  Just curious - when was the last time you got a dividend from
____________ ? (you fill in the name of a locally owned business).
	
	Most of our police, fire, k-12 personnel and government employees
are covered by PERSI.  The WalMart holdings for PERSI for the last year
totalled $48,655,272 - it was the fourth largest equity holding by PERSI.
This one touches a bit closer to home - if you are a PERSI person, you have
a substantial investment at stake here.
	
	But the real point is that if you hold mutual funds, retirement
accounts, investment accounts - before you take a position on a business
entity, you might want to look not only at how that business treats its
customers, you might want to consider how restrictions on those businesses
would affect your portfolio holdings.  
	
	As I noted earlier, the economic system is a complex network of
relationships.