At the Bell

World Series teams: Financial phenoms

George Steinbrenner and his 16 partners plunked down $8.8 million in 1973 to buy the then-down-on-their-luck New York Yankees. The team has since grown into a $600 million sports goliath within three decades.

By comparison, $8.8 million invested in the Standard & Poor’s 500 stock index in January 1973 would be worth $268 million today – a nice return of 2,950%. But that’s almost pocket change compared to the 6,718% return Mr. Steinbrenner and his original partners have garnered.

The value of the Mets investment by Fred Wilpon and Nelson Doubleday has also grown. In 1986, the owners paid $95 million – at the time a record for a major league baseball team – to Doubleday & Co., which was being sold to Bertelsmann AG.

Valued at $500 million, the Mets have given the Wilpon-Doubleday ownership team a 426% return on its investment. The same investment in the S&P 500 would today be worth nearly $756 million.

SEC backs off rule on directors’ kin

A proposal that independent mutual fund directors disclose holdings in the fund’s advisory company held by relatives outside of their immediate families will be scaled back, according to Paul Roye, director of the division of investment management at the Securities and Exchange Commission. He spoke last week at a conference on life insurance.

Mr. Roye said the rule, which is likely to be issued in November, probably will only focus on disclosures of holdings by members of the independent directors’ households.

Directors also will not be required to disclose specific amounts of their holdings, but instead they will likely be required only to give ranges for the amount of their fund holdings.

But Mr. Roye said he favored sticking with the requirement that funds maintain independent counsel for independent directors. Some in the industry have complained that that would be too expensive for smaller companies.

He pointed to a recent report from an American Bar Association task force that agreed that independent counsel was essential for outside directors to get objective advice.

New funds to use public stock picks

Interactive Funds.com of Dallas and iExchange.com of Pasadena, Calif., merged Thursday to offer three new and iconoclastic mutual funds.

The funds will use the data-mining software of Interactive Funds to distill the 90,000 stock research reports written by iExchange.com’s 9,000 individual investors. The research will then be used to select stocks for the three funds.

“We have seen academic research which shows that individual investors, as a group, come out ahead of investment houses in terms of stock selection,” says Ron Pruitt, Interactive Funds’ vice president of product development.

“Our technology seeks to overcome this inconsistency by applying professional money management techniques to collective investor intelligence.”

Securities industry setting profit mark

The securities industry’s revenues and profits for the first nine months of 2000 should exceed the record results achieved for the full year of 1999, both for domestic and worldwide operations, according to the Securities Industry Association.

The association estimates that global pretax profits through September should reach $46.7 billion, 12% above 1999’s record of $41.6 billion. On an annualized basis, the industry’s profits for 2000 could reach $62.3 billion, a 50% increase over 1999’s $44.6 billion.

That would follow on the heels of last year’s 89% increase in profits over 1998’s total of $22 billion.

New offerings of common and preferred stock rebounded 28% to $18.8 billion in August, from $14.7 billion in July. Volume for initial public offerings increased for the third straight month to its highest level of the year in August, but dollar proceeds fell short of July’s total as only one multibillion-dollar deal was completed.