Wednesday, October 23, 2013

Harriman vs. Hill: Investing lessons for today

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BY LARRY HAEG
Former executive vice president of corporate communications for Wells Fargo & Company and author of Harriman vs. Hill: Wall Street's Great Railroad War


The central events of Harriman vs. Hill took place 112 years ago—long before the federal government regulated the trading of securities and before it prohibited insider trading and the secret manipulating of stock prices. The Federal Reserve was still a decade away from creation and at the time of this story J. P. Morgan himself served as sort of the de facto central bank for the United States, exerting his considerable influence on the market to guide interest rates.

Given the great chasm of technology and regulation that separates us from 1901, could there be any lessons in Harriman vs. Hill for average investors today? I didn’t embark on Harriman vs. Hill to answer that question. I’m merely an average (and sometimes, not well-informed) investor myself. Here are, however, four timeless lessons for investing that are obvious to me from this story:

1. There is a big difference between risky, short-term speculation and patient investing for the long-term. The traders who “shorted” Northern Pacific common stock in early May 1901 were correct in guessing that the stock was drastically over-valued, but they multiplied their risk by making a huge short-term bet that the stock would drop quickly. When the stock, instead, rocketed up many of them lost small, and large, fortunes and had no one to blame but themselves. There is no more painful story in Harriman vs. Hill than that of a pour soul named Theodore S. Baron, whose dire fate I found buried in newspaper accounts of the Northern Pacific panic. On Monday, May 6, 1901, he walked into a brokerage office in New York intending to buy a thousand shares each of Northern Pacific and Southern Pacific. Had he done so he would have been $700,000 wealthier in just three days and even wealthier if he’d held onto those stocks for a lifetime and reinvested their dividends. Instead, he changed his mind at the last minute and decided to short both of them. He lost $160,000, was arrested for trying to pass a bad check to cover his short position and lost his partnership in his dry goods company.

2. There are bargains in the market for those who can spot value in the wreckage. Northern Pacific went bankrupt in late 1893 for the second time in twenty years. Three years later, when Morgan was reorganizing it, one could have bought a share of “Nipper” common for 25 cents. It would have been an opportunistic bet on the railroad’s future value and on the future expansion of the American West. Five years later, on the morning of Monday, May 6, 1901, Nipper common opened at $110 a share. Patience in those ascendant years of the American economy also served investors such as Arthur Orr of Chicago. He bought 10,000 shares of Union Pacific in 1898 for $20 a share just as Harriman and Schiff were beginning to revitalize it during the McKinley boom years. He held on to his Union Pacific stock even though it didn’t pay a dividend much of that time. He believed in the railroad’s future earnings power and Harriman’s magic touch. He was rewarded for his patience and faith. He sold those 10,000 shares on May 2, 1901, at $131 and netted more than $1 million, about $26 million in today’s dollars.

3. Beware of over-inflated asset values. On a pivotal date in Harriman vs. Hill—the day Morgan left for Europe on April 3, 1901—speculators had driven many railroad stocks up to levels impossible to sustain. Erie railroad stock had risen 234 percent in just over five months, the Wabash was up 184 percent, the Denver & Rio Grande 127 percent. In a year the prices of many railroad stocks had collapsed. If you’d bought a certain basket of railroad stocks at their highs in 1902, thinking the sky was the limit, your investment in, say, Reading railroad would have dropped 34 percent by April, 1903, or Louisville and Nashville down 29 percent, or Illinois Central down 26 percent. “Subscribers here by thousands float/” wrote Jonathan Swift in the early 18th century after the collapse of the South Sea bubble, “And jostle one another down/ Each paddling in his leaky boat/ And here they fish for gold, and drown.”

4. I have faith in the inherent, long-term strength of free enterprise capitalism. It’s not perfect but if you find a better model please let me know. All four of the principals in this story—J.P. Morgan, James J. Hill, Edward H. Harriman and Jacob H. Schiff—believed in the wisdom and efficiency of free markets and that free enterprise was, as de Tocqueville said, the “foremost cause” of America’s “rapid progress, its strength and greatness.” Or, as J. P. Morgan used to quote his father, “Any man who is a bear on the future of this country will go broke.” Jacob Schiff came to America as a young man from Germany in the mid-nineteenth century because he saw American free enterprise as the hope of the world. That’s why he proudly flew the American flag and not his company’s flag on the staff atop the Kuhn, Loeb & Company building in the New York financial district. “True Americanism does not mean only to fight for one’s country,” he once wrote, “but also . . . to serve your country in your daily life.” He was one of the most philanthropic Americans of his generation, giving millions to charitable enterprises. On the evening of May 9, 1901—the day of the Northern Pacific panic—Jacob Schiff reportedly was not at his desk at Kuhn, Loeb but delivering meals with his wife, Therese, to the clients of the Henry Street Settlement House on the Lower East Side.

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Larry Haeg is author of Harriman vs. Hill: Wall Street's Great Railroad War. He is a former broadcast journalist and former executive vice president of corporate communications for Wells Fargo & Company. 

"I first read about the Northern Pacific Corner when I was ten years old. When I opened my office on January 1, 1962, I put on the wall a framed copy of the New York Times of May 10, 1901, describing the fateful prior day. Larry Haeg now tells the full story, and I enjoyed every word of it."
Warren Buffett

Wednesday, October 16, 2013

Breaking down motherhood myths: A Q&A with Kate Hopper





Kate Hopper is author of Ready for Air: A Journey through Premature Motherhood. During the month of October, she is participating in a blog tour and running a contest in which entrants have the opportunity to have Kate visit their book club in person (locally) or via Skype. Enter here.

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What inspired you to write Ready for Air?

When Stella was born prematurely I had to withdraw from graduate school in order to care for her at the hospital and then at home. I had been writing for a few years, but it was during the long winter after Stella’s birth that I first felt desperate for words. I craved stories that would reflect some of the conflicted emotions I was experiencing as an isolated new mother, and I also knew that I needed to get the details of my new reality down on the page. But I couldn’t think much less write in those early months.

Stella was five months old when I began to write again. One evening I went to the coffee shop by our house and pulled out paper and a pen. But instead of returning to the half-finished pieces I had been writing before Stella’s birth, it’s was Stella’s story that came out. I began with an image: my daughter, writhing on white blankets, beamed from the NICU into the television set in my hospital room days after she was born. As soon as that image was down on paper, other images followed. After an hour, there were tears in my eyes, and words covering the page. And for the first time since Stella was born, the world felt a little bigger, and I felt a little less alone.

The story felt urgent to me in a way that my previous writing hadn’t. I wanted to write an honest account of early motherhood and what it felt like to have a baby in the neonatal intensive care unit. I wanted to write my truth without sugarcoating it. That’s what got me started.

What do you hope readers will take away from this book?

I hope readers will be inspired to write their own stories and to think about how sharing their experiences might bring hope to another person. For me, this book is really about how stories connect us to one another. So let’s do that for each other through writing, through sitting down and talking to each other—about the hard stuff, the beautiful stuff and everything in between.

Stella was born prematurely because you developed preeclampsia. Can you talk a little bit about that and what you hope your book might do to increase awareness about preeclampsia?

Preeclampsia is a pregnancy-induced disease that is characterized by high blood pressure, edema, and proteinuria. It affects 5-8% of all pregnancies and can lead to seizures, stroke, organ failure and death of the mother and baby. It’s responsible for over 76,000 maternal deaths and 500,000 infant deaths worldwide each year. It’s really terrifying. The good news is that in the last decade there have been some research breakthroughs leading to a better understanding of the causes of the disease. Hopefully continued research will provide effective treatments. In the meantime, I hope that my book will help spread awareness about the symptoms and the severity of the disease.

As a teacher, you discuss writing the hard parts of motherhood and how writing can be therapeutic and still be art. Can you talk about this in relation to your own memoir?

At readings and in interviews over the years, I’ve heard authors—specifically memoirists and essayists—claim that the process of writing their stories wasn’t therapeutic, and I’m always curious about that. I think writers sometimes fear that if their writing is tied in any way to “therapy,” it will somehow undercut the work they’ve put into crafting it. But I believe that you can experience a therapeutic transformation in the writing process and still end up with art.

Writing about Stella’s birth and that first challenging year definitely helped me process that experience and let go of it. Sometimes I would come away from writing feeling drained because I had to relive the trauma of those early weeks. But once a scene or moment or memory was down on the page, it lost some of its power over me, and I could look at it as a writer rather than as an overwhelmed new mother. That’s when I could begin crafting it: tweaking my sentences, deepening scenes, making sure I had enough reflection, etc. The catharsis often comes by getting your experiences out of your head and onto the page. Then in the revision process you have to make sure you have crafted that experience to the best of your ability. One phase doesn’t diminish the other.

Why is motherhood literature important?

I’ve been reviewing motherhood literature and working with mother writers for almost a decade now, and I’ve read so many really amazing memoirs and essays during that time. These pieces deal with issues of identity, with loss and longing, neurosis and fear, ambivalence and joy—the stuff of life. But because this work also has to do with motherhood, with children, it’s often boxed up, labeled “momoir,” and discarded as unimportant or not literary enough.

But we need these stories to sustain us, to help break down the myth of motherhood. I love what Debra Gwartney, author of Live Through This: A Mother’s Memoir of Runaway Daughters and Reclaimed Love, says: “A well-written book [about motherhood] is going to say something profound about the human condition, and we need to hear the voices of women who can express the plight we’re all in as humans.” Amen!

How can writing the hard parts of motherhood help others?

I’ve had students who have felt really uncomfortable writing about the challenging parts of being a mother. But these are exactly the stories that need to be written so that other mothers know it’s okay if they experience a similar thing. You aren’t crazy! You aren’t a bad mother! So I always encourage them to write toward their fears, write those things that they’re too afraid to say out loud. Because, as one of my students said, “Every time someone has the courage and honesty to write about [situations and emotions] that are difficult, it normalizes the experience for another mother down the line. And our shame and fear and isolation get broken down a little more.”

When the gritty, the heartbreaking, and the gorgeous and breathtaking parts of being a mother are given voice—and space—to exist side by side in literature, we can begin to chip away at the myths that surround motherhood. And coming face-to-face with our mother fears on the page cannot only help us lay them to rest; it can help other mothers who might someday read our words.

In Ready for Air you write a lot about your husband, Donny, and your lives together. Was this challenging? Did you get his approval before the book was published?

Our relationship is a really an important part of the book. Marriage is wonderful of course, but it’s also messy and lots of hard work. When you add a crisis to that mix, things get even more difficult. So part of the story in Ready for Air is how we make it through that really challenging year together and whole. I’m interested in the ways that men and women deal differently and/or the same with crisis and the unexpected, so I knew I’d have to write about the inside of our marriage.

When I began writing the book, I actually struggled to get Donny down on paper in a way that made him come alive. When I was in front of my computer, I couldn’t remember how he held his head, what his mouth did when he was nervous, and so on. I had taken all of those gestures for granted, and I couldn’t tease them apart. So I had to go home and really study him in order to get his mannerisms onto the page.

Donny read the manuscript a number of times, and he had veto power, both in terms of what I write about him and us and also what I write about his family. He’s a private person, so I wanted to make sure he felt comfortable with me sharing what I shared about us. Interestingly, he only asked me to change one small detail in the whole book. Changing it didn’t alter my memory of the emotional truth of the scene, so I changed it. He’s my biggest supporter. It’s the least I could do.

What are you working on now?

I’m working on a proposal for a ghostwriting project, a memoir about a family that has identical twin, 23-year-old sons who are marathon runners despite the many challenges they face due to severe autism. It’s an amazing story, so I’m looking forward to continued work on that. I’m also very slowly working on a novel. My goal for the coming year is to carve out the time to work on it regularly.

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Kate Hopper is author of Ready for Air: A Journey through Premature Motherhood. She teaches writing online and at the Loft Literary Center in Minneapolis, where she lives with her husband and two daughters. She is currently running a book club contest; if you would like the opportunity for her to visit your book club in person (locally) or via Skype, please see directions to enter here.


"There is no writer I'd rather follow this journey with than Kate Hopper. Her storytelling skills are stunning. You will be rooting for her and her new family all the way."—Hope Edelman, author of Motherless Daughters


"Hopper bravely explores what happens when we expect joy and instead are handed traumatic challenge, and she does so with a fresh, piercing, and, at times, humorous voice. I can’t imagine a parent who wouldn’t relate to this compelling story of a child nearly slipping away."—Debra Gwartney, author of Live Through This

Wednesday, October 9, 2013

Cosmologies and the future of scholarly communication

The astronomical system of Ptolemy, in which the Earth is at the center of the universe.

A model of Copernican heliocentrism, published in 1543, in which the sun is at the center of the universe, with Earth and other planets revolving around it. As Copernicus' model followed earlier challenges to that of Ptolemy, so university presses are migrating a new scholarly communications cosmos that follows challenges that came before it.




BY DOUG ARMATO, director of University of Minnesota Press
This is the introductory text to a talk delivered at "The Future of Academic Scholarship and Publishing" conference on
Sept. 19, 2013, at Indiana University


Though we have become accustomed to thinking of ourselves as involved in, or confronted by, a revolution in scholarly communication, I see this moment as more akin to the emergence of a new cosmology of scholarly communication—a time not so much of economic reallocation or technological transformation (though both of those are surely forces) as much as a dramatic expansion and realignment of the megacosm and where all of us—scholars, students, librarians, publishers, tenure and promotion committees, administrators—locate ourselves in it.

The most famous shift in cosmology, of course, was that from the ancient Ptolemaic and Aristotelian system in which the sun and the planets were seen as revolving around the earth to the Copernican system in which the Earth was decentered, just one of several bodies orbiting around the sun. Similarly, university press publishers, who could until recently feel that the entirety of humanities and social sciences scholarship revolved around the monographs and journals they publish, now find themselves one of several planets revolving around that sun—others being scholarly blogs, social media sites, digital commons, web-based scholarly projects, library publishing, open access scholarly presses, and the emerging digital humanities. The very universe of scholarly communications has dramatically expanded and it is the challenge for university press publishers, and everyone involved in scholarship, to redefine themselves in the gravitational fields of that new cosmos.

To continue with Copernicus for the moment, we should consider that the Earth did not crumble to dust upon the publication of De revolutionibus orbium coelestium in 1543. Nor will university presses suddenly perish in this new scholarly communications cosmos. What occurred in the sixteenth century is that the decentering of the Earth, and the theological system built around it, made room for new ways of thinking and that is precisely what we are seeing in the rise of digital humanities and the Open Access movement today. It is also important to note that Copernicus’ heliocentric model followed several earlier challenges to the logic of Ptolemy’s geocentric universe. University presses, too, have survived several shocks before this current moment of cosmological shift.

Akin to Ptolemy’s long-lived system, university presses stretch back to the antiquity of the North American university. The first book published at an American university was at Harvard in 1636 and the first formal American university press established at Cornell in 1869. Heralding a familiar phenomenon of university publishing operations being closed or threatened with closure, the press at Cornell ceased business just six years later, in 1884, only to be resuscitated in 1930. The longest continually operating university press was founded at Johns Hopkins in 1878, a press that has remained at the leading edge of our profession, co-founding Project Muse in cooperation with its parent institution’s Milton S. Eisenhower Library in 1985 and, in 2011, joining with a broad consortium of university presses to add frontlist scholarly e-books to its invaluable platform.

Leading up to and through the New Deal era, university presses were being founded at a rate of about one each year—Minnesota’s in 1925, Indiana’s later in 1950—a rate which continued through to the 1970s, when the end of the federal subsidies for university libraries under the Cold War Era National Defense Education Act began the long slide in library monograph purchases, the “Monograph Crisis,” that gained speed with the “Serials Crisis” of the 1980s, the Open Access movement of recent years and, now, exploded beyond its original boundaries with the “Crisis in the Humanities” today. Arguably, then, university presses have been in some form of crisis since the late 1970s, some 35 years ago.

I started my career in university presses in the late 1970s, some 35 years ago. When I started in university presses in 1978 at Columbia, over 70% of our book sales were to libraries with the rest—to bookstores, to individuals scholars and graduate students, for course use, and overseas—seen as “icing.” That “icing” now overwhelms the cake itself, with libraries accounting for only an estimated 20% to 25% of university press sales. Amid this career-long “crisis,” university presses have in fact held their own, with overall sales even increasing by about ten percent over the past, economically difficult decade and ebook sales now rising rapidly—currently quicker than in the publishing industry as a whole. So, given this record of resilience, overcoming adversity and, though we receive little credit for it, innovation, why be concerned about the future of university presses?

The reason, as I’ve suggested, is that not only has the world changed—university presses are used to that—but the cosmos has shifted, calling into question the place of presses not just in the university—again, a familiar dilemma—but in a far more diverse, fast-moving, and increasingly decentered system of scholarly communications. The issue at hand isn’t simply print vs. electronic nor even “Open” vs proprietary, copy-left vs. copy-right. These are economic and thus solvable problems. It is, to my mind, the emergence of more informal, iterative, and collaborative scholarly communications vs. formal, fixed, and author-centered—literally: authorized—scholarly publishing. The digital humanities scholar and bot provocateur Mark Sample once hyperbolically referred to this dichotomy as Muppets vs. Highlanders; he was joking, but he wasn’t far from the truth.

I believe we need both these informal and formal systems. The challenge before all of us is to integrate the two, to make them interoperable, and university presses have, I must admit, been slow to acknowledge, much less accept, this expanded scholarly communications universe, one that increasingly orbits around scholars with multiple and diverse publication choices rather than fixed, comprehensive library collections of peer reviewed monographs and journals. If, with the rise of this new cosmological system, the university press establishment has not been been burning its heretics, we have also not yet heeded them.

Wednesday, October 2, 2013

"The landscape with its special magic and the people with their stories": How Minnesota's North Shore inspired Vidar Sundstøl's chilling Minnesota Trilogy.

Vidar Sundstøl in Two Harbors, Minnesota. Photographs by Shea Sundstøl.


BY VIDAR SUNDSTØL
Acclaimed Norwegian writer and author of the Minnesota Trilogy


The last seven years of my professional life in Norway have been focused on writing or speaking about the North Shore of Lake Superior. The people, the forest, the lake, the history.

However, I have not traveled back to Minnesota once during the course of these seven years. The real place has become increasingly distant from me, while the fictional North Shore that I have written about has been clearer and more detailed for every year that has passed.

I remember very clearly the first time I laid eyes on Lake Superior. My wife and I had lived in Kentucky when she was offered a job with the US Forest Service in the Superior National Forest. We drove up to find a place to live. After a couple of days with a fairly uniform prarie landscape outside the car windows, there occurred something that I will remember as long as I live. There is a place along I-35—I can't remember exactly what it is called anymore—where Lake Superior appears without warning, in all of its majesty. This wide expanse of grey water hit my eye like something out of another world. The whole landscape was suddenly changed completely, and somewhere inside me I knew that everything else was about to change as well. It wasn't just a new chapter in life that was beginning. It was a whole new book.

It was raining as we drove down the hills into Duluth. I still remember seeing the city for the first time: the wooden Victorian houses along steep streets oriented toward the lake. We listened to A Prairie Home Companion on the car radio while we drove down those hills toward town. It was Memorial Day, 2004, and Garrison Keillor sang an incredibly sad song about an old man who observed Memorial Day every year. And every year there were fewer of his companions left. In the end, there was only him. In this rather grey and heavy atmosphere we drove into the tunnel with stylized Viking ships along the top.

I remember thinking that we had definitely left the South behind us.

I hated the North Shore. There were no people there, only trees and that endless, grey lake. But I had to live there, because that is where my wife worked. When we moved two years later, I remember thinking: This can't be true. We can't leave the North Shore. Not for real. We can't do this. But we had already planned everything, and my elderly parents were waiting for us back in Norway.

Father Baraga’s Cross, located in northern
Minnesota where Cross River meets Lake Superior.
What happened in the meantime? How did "I hate this place" become "I can't leave here"? It was a mixture of two things: The landscape with its special magic and the people with their stories. Stories about their ancestors who came from Norway or Sweden a couple of generations earlier. At Tofte Cemetery I saw headstones with the names of people who had been born in Norway and who had left everything they knew to find a new future. Not the old future. That was left behind in Norway. On Halsnøy, perhaps.

All of this, and many other things, made it difficult to leave the North Shore in the end. In just two years I became connected to the area with ties that have of course become weaker with time, but which will never be completely gone. And the strongest of these ties is probably the books I planned while living there and which I wrote upon returning to Norway.

The Minnesota Trilogy. It was a breakthrough for me, as a writer, both in Norway and internationally. For many years now have people been able to read about Lance and Andy Hansen, sheriff Bill Eggum, and the murder at Baraga's Cross in French, German, Dutch, and many other languages.

Now the story is finally coming home. And maybe that is what I am doing when I will soon travel to the North Shore.

Maybe there is a little part of me that feels like I am coming home again.



Vidar Sundstøl will visit Minnesota for a stretch of time in October. Several public events are lined up in Minneapolis, Stillwater, and Duluth. Click the image below for details:



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Vidar Sundstøl is the acclaimed Norwegian author of six novels, including the Minnesota Trilogy, written after he and his wife lived for two years on the north shore of Lake Superior. The Land of Dreams was nominated for the Glass Key for best Scandinavian crime novel of the year, and the series has been translated into eight languages. The remaining novels in the trilogy—Only the Dead and The Ravens—are both forthcoming from Minnesota.


"The Land of Dreams is a brilliant investigation into the darkest of all mysteries—the human heart. In its complexity and beauty, the story is every bit the equal of the landscape in which it is set, the stunning North Shore of Minnesota." —William Kent Krueger, author of Ordinary Grace