Turning Around The Merchant Marine

WASHINGTON – If a nation’s preeminence is measured by the size of its maritime shipping industry, then the United States is in decline. Consider: Since 1991, America’s merchant fleet has dropped to 260 ships from 536, according to the American Maritime Congress, the industry group representing ocean carriers. Just 4% of U.S. trade is carried on U.S.-flagged vessels.

For Charles G. Raymond, chief executive of Charlotte, N.C.-based ocean shipper Horizon Lines, that’s evidence that the government needs to do more for the industry. “Clearly, there’s a need for a government focus on this,” he says, adding that “there should be a high-level, blue ribbon committee that looks into what can be done and the key drivers to make it happen in a socially and fiscally responsible way.”

And in a way, of course, that helps Raymond’s company. Horizon Lines, which CSX sold in February to Washington buyout firm The Carlyle Group for $300 million, is one of America’s biggest ocean haulers, moving freight on 17 ships between the continental U.S. and Alaska, Guam, Hawaii and Puerto Rico.

But Raymond and others in maritime transportation insist the matter goes well beyond their own self interest. On its Web site, the American Maritime Congress points out that 95% of military cargo must travel by sea during wartime. Raymond, who started his career as a deck officer for Sea-Land in 1965, recalls scrambling to retrofit two Sea-Land ships to haul ammunition when Japanese and Danish sailors suddenly refused to carry America’s military supplies during the first Gulf War.

“When you have to sustain the surge of material going into a war zone,” he says, “you find guys have gotten hurt, or they’ve been out at sea for 75 days and they’ve got family issues and need to be replaced. That’s where we run into trouble as a nation, coming up with enough mariners to keep those vessels manned on a sustained basis.”

Full story at Forbes.com

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Growth Stocks With A Story

Before she got her M.B.A., money manager Maureen Cullinane took undergraduate and master’s degrees in French literature. Cullinane, who tends to $1.2 billion as lead manager of Evergreen Investment’s Omega Fund, says the literature stuff still comes in handy in the investment world.

“Everyone comes into this field with different specialties,” she explains. “For those of us with the liberal arts background, it’s trying to find a good story, even more than the numbers.”

These days Cullinane, who started with Evergreen in 1974, sees a particularly compelling story in Baby Boomer demographics, particularly the growing demand for healthcare as the generation ages.

This is a tale oft-told on Wall Street. Is it overplayed? Cullinane doesn’t think so. On healthcare, for example, she points out the wide variety of sub-sectors–medical devices, managed care, pharmaceuticals, and so on–that are constantly falling in and out of favor. “There are so many healthcare ideas out there,” she says, “there’s always something you can invest in.”

Full story at Forbes.com

Just One Stock

If you could have a single stock in your portfolio for the next year, which would it be? That’s the question we put to 17 investment pros each autumn. Five give us short picks, the rest go long, and anyone who beats the market is asked back for another year.

The bulls ended the 2002-03 contest with a collective 30% gain, versus 19% for the S&P 500 index. But propelled skyward by a pair of rebounding microchip stocks–Intel and KLA-Tencor–our bears selected stocks that rose anaverage 44%, no fun for a short-seller.

Richard Driehaus headed our bulls with a 114% increase on Nextel but declined our return invitation. Not sofor Joseph Zock, who took the silver medal with Cendant’s 78% surge. Zock, president of Capital ManagementAssociates, re-ups with shipper CNF. Reason: An improving economy means more stuff to haul.

The only bear to survive the last round is Bernie G. Schaeffer, who runs a research firm in Cincinnati. He foresaw trouble for Pfizer last year; the stock shed 1% over the course of the contest. For the year ahead, Schaeffer tags Johnson & Johnson for a short sale; he sees trouble in both the Procrit anemia drug and stent businesses.

Full story at Forbes.com

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