Calm prevails despite selloff
• Dow drops 7.1% but avoids any sign of panic selling
• Hawai'i travel, biotech firms hit hard
By Frank Cho and John Duchemin
Advertiser Staff Writers
Having lived through the Gulf War, Linda Heloskie has seen calamity before, and she knows that financial markets can rebound quickly from disaster. So despite the horror of last week, Heloskie, a U.S. Postal Service worker in Honolulu, is not about to change what she does with her money.
"There's no need to worry. During the Gulf War, our boys went over there to fight but we went to work as usual," she said. "Now it's the same. No one's going to run to sell their stocks or take their money out of their bank."
Hawai'i stockbrokers said such calm was the norm among local investors yesterday, despite markets that turned stormy on their first day of trading since the Sept. 11 terrorist attacks.
Many Hawai'i residents say that while they are worried about the future, they don't plan to change the way they invest. They expect the market to rebound, as it has always done through recessions, wars, assassinations and other disasters.
"Of course I'm worried — what's not to worry about — but I'm not going to turn everything upside down because of these events," said Anson Gutierrez, a Web developer who works in downtown Honolulu.
Panic calls to brokers were few, and some bought shares as the major financial indexes plunged and prices of many stocks sank to bargain-basement levels.
"We are not seeing 20 or 30 people calling us up and saying, 'Get me out!' " said Scott Storkamp, a financial consultant with UBS Paine Webber in Honolulu. "I think there is less emotion in the market than we normally see. People are looking at this with some hope."
Brokers and financial planners urged investors to think long-term, wait out the current uncertainty and perhaps expect a rally as businesses recover from the shock.
Storkamp said the situation is comparable to when President Kennedy was assassinated or when the Gulf War started. In each of those cases, the markets fell, but substantially rallied within a year.
"The big question is what happens next," he said. "What is the military going to do? It's like we are waiting for the other shoe to drop."
Some local brokers reported more interest in buying than selling.
"It gets back to the notion that people look to buy if they see that prices are reasonable," said Toby Martin, vice president and branch manager for AG Edwards & Sons in Honolulu. Like other brokers, he said trading was not unusually heavy.
At the Honolulu office of Raymond James, more investors were looking to buy than sell yesterday, said branch manager Mario Yim.
"We're advising people to stay put until it settles out," Yim said. "We don't think it's over yet ... there's still a little ways to go ... but it's likely to rebound rather quickly."
At Morgan Stanley Dean Witter's Honolulu office, brokers had taken 20 large institutional orders through midmorning — 17 to buy and three to sell, said Paul Loo, senior vice president of the Pacific region. "We don't see a lot of people heading for the doors," he said.
Loo said call volume to brokers was up as investors set prices at which they would buy stock they believe to have fallen to reasonable levels.
"We are getting some bottom-fishers," Loo said. "But nobody is rushing in yet, because there is still a degree of uncertainty. It's like the first day of the Gulf War: We already had Saddam on the run, but there was this uncertainty."
