Category: Nebraska

Level 3 Failed, In Spite of a Well-Executed, Plausible Business Plan

Level3StockPricesGraph2017-06-09.jpgSource of graph: online version of the Omaha World-Herald article quoted and cited below.

(p. 1D) Thomas Dowd and hundreds of other Omahans soon will be digging out their Level 3 Communications Inc. stock records. • The reason: This week, Level 3 shareholders are voting to sell the company to Century Link Communications. • The sale marks the end of an investment saga that began 20 years ago with hopes of riches but ended with big losses for most shareholders, despite the efforts of some of Omaha’s biggest names in business. • “It was a very bad experience,” said Dowd, a retired attorney and former director of the Metropolitan Utilities District. “It’s just one purchase at a time, and you think everything’s going good and then, bam! Anyway, lesson learned.” • Although his loss was “substantial,” he said, it didn’t disrupt his lifestyle, and he figures he’s better off than shareholders who lost their retirement savings or other vital funds. He’s still a Level 3 shareholder and will get some cash and Century Link shares in the sale, which is scheduled for September [2017].

(p. 4D) But it works out to about $4.43 for shares he bought years ago, some of them costing more than $100.
. . .
On March 20, 2000, someone sold and someone bought Level 3 shares for $132.25, a price that made the company’s publicly traded stock worth nearly $20 billion. By 2002, the price had nearly collapsed, putting most shareholders into the red.
Level 3 might have an information highway, but its toll system wasn’t collecting enough to earn a profit. It was clear that the nation had a “bandwidth glut,” a huge overcapacity of fiber networks.
Level 3 had installed its network, at an eventual cost of $14 billion, and could cheaply add more lines by stringing extra cable through its conduits.
But others had built networks, too, and the demand for bandwidth wasn’t growing as Crowe had hoped. Researchers also found ways to send more data along existing fibers, meaning greater capacity along existing lines.
Most of the new fiber networks were unused, or “dark.” Only a fraction of fibers in the buried bundles were “lit” by the light waves that carried digital communications and brought in revenue for companies like Level 3.
The supply of fiber far outran the demand, and Level 3’s losses mounted, along with its stock price. Investors lost confidence that the company would begin making profits anytime soon. In fact, that didn’t happen until 2014.
. . .
Dowd, the retired attorney, said he held onto the shares because it didn’t seem worthwhile to sell at the lower prices and he figured someone would buy the company and he would get some of his money back.
“I always thought Walter Scott was going to pull a rabbit out of the hat,” he said. “He never did.”

For the full story, see:
STEVE JORDON. “END OF THE LINE FOR LEVEL 3; Omaha-born company, which laid fiber-optic cable, will cease to exist.” Omaha World-Herald (Sun., March 12, 2017): 1D & 4D.
(Note: ellipses added.)

Founder Movie Is Unfair to Entrepreneur Ray Kroc

(p. 1D) McDonald’s franchise owner Jim Darmody of Omaha notes that the Hollywood film about Ray Kroc doesn’t always put the self-proclaimed “founder” of the fast-food chain in a good light.
“The movie makes it seem like he stole something from the McDonald brothers,” Darmody said. “But I can’t fault him. He bought it from the brothers and made it a dynasty.”
. . .
(p. 3D) Ray Kroc not only made a fortune that his wife turned into philanthropy, Jim said, but also created opportunities for people like himself.
. . .
Darmody said the McDonald’s Corp. has an excellent inspection program at stores for consistency and cleanliness.
Communities, he said, also have benefited from the presence of McDonald’s.
Kroc died in 1984. His widow, Joan Kroc, who died in 2003, left her $1.5 billion estate to charity.
. . .
. . . in a 1993 phone interview, Dick McDonald told me that he and his brother had no regrets about selling to Kroc for what later seemed a pittance.
“Neither of us had any youngsters who would go into the business,” said Dick, who had come up with the idea for golden arches. “I guess we could have stayed and piled up millions. But as my brother once said, ‘What can we do with $40 million that we can’t do with three or four million — except pay a lot of taxes?’ ”
. . .
Darmody, who has flipped a few burgers, said he learned some things from the movie, including how the brothers came up with the speedy production system. But without Kroc, he said, McDonald’s wouldn’t be what it is today.

For the full story, see:
Michael Kelly. “Following in the Footsteps of Founder.” Omaha World-Herald (Thurs., March 2, 2017): 1D & 3D.
(Note: ellipses added.)
(Note: the online version of the story has the date Mach 4 [sic], 2017, and has the title “Kelly: McDonald’s franchise owner in Omaha says ‘founder’ Ray Kroc created opportunities for people.”)

Farmer and Mechanic Invented Pivot Irrigation System

(p. D1) LINDSAY, Neb. — Paul Zimmerer’s contribution to agriculture is now forever immortalized.
A recent ceremony in Lindsay dedicated a memorial to the late inventor whose irrigation system dots the landscape throughout the country.
Zimmerer, inventor of the Zimmatic Pivot Irrigation System, died July 31, 2008, at the age of 94.
. . .
Dave Albracht, chairman of the Lindsay Village Board, said Lloyd Castner, a member of the Platte County Historical Society, first approached him about a memorial.
“I’m sure everybody knows that the small towns struggle, and Lindsay wouldn’t be where we’re at if it wasn’t for the Paul Zimmerer family,” he said.
. . .
Zimmerer opened a blacksmith shop in 1955 and sold modified car engines to be used on irrigation wells. His idea became the foundation of one of northeast Nebraska’s largest companies, Lindsay Corp.
He was a farmer and mechanic and owned Zimmerer Auto Repair and Gas Station in Lindsay before founding Lindsay Manufacturing Co., which is now Lindsay Corp.”

For the full story, see:
Patrick Murphy. “Memorial dedicated to Zimmatic Pivot inventor.” Omaha World-Herald (Fri., Nov. 25, 2016): 4D.
(Note: ellipses added.)

Federal Regulations Restrict Concrete Innovation

(p. B1) Chris Tuan, a professor of civil engineering for the University of Nebraska at the Peter Kiewit Institute, has been perfecting an electrically semiconductive concrete over the past 20 years.
The mixture includes a 20 percent mix of steel fibers, shavings and carbon added to a traditional concrete mix. Steel reinforcing bars serve as the conductor, and once electricity is added, the concrete heats to 35 to 40 degrees — just enough to melt the ice and snow.
. . .
For now, the concrete can’t be used in public spaces. Anything exposed and electrified above 48 volts — much less than the 208 volts used in Tuan’s concrete — is considered high voltage and is not allowed. Federal law will have to be rewritten to change that.
. . .
Tuan said traditional concrete needs to be replaced every five years or so. Without chemical use, the electric concrete lasts much longer, with fewer potholes. His concrete is also maintenance-free, because the power cords and conductive rods are encased in the concrete and not exposed to the elements.
. . .
In 2013 Tuan also implemented his concrete on ramps in China. He recently installed a private driveway in Regency using the legally allowed 48-volt limit, which is less energy efficient.
“If the government or if insurance agencies approve this technology, then everybody can use it,” Tuan said. “But right now, it’s almost cost prohibitive.”

For the full story, see:
Reece Ristau. “In Concrete World, This Is Hot Stuff.” Omaha World-Herald (Tues., JAN. 15, 2016): B1 & B2.
(Note: ellipses added.)
(Note: the online version of the story has the title “Special Concrete Mix Can Melt Snow and Ice All by Itself — Just Add Electricity.”)

What If Steve Jobs Ran the I.C.U.?

We’d like to think that medical intensity and competence in the real world mirror the intensity and competence of television shows like ER and House. But too often it is like the horrible surreal story told below. What if we deregulated medicine to open it to the product and process innovations of intense innovative entrepreneurs like Steve Jobs, Jeff Bezos, and Sam Walton?

(p. 7) Omaha — I’ve been watching the monitor for hours. Natalie’s asleep now and I’m worried about her pulse. It’s edging above 140 beats per minute again and her blood oxygen saturation is becoming dangerously low. I’m convinced that she’s slipping into shock. She needs more fluids. I ring for the nurse.

I know about stuff like septic shock because for more than 20 years I was a transplant surgeon, and some of our patients got incredibly sick after surgery. So when I’m sitting in an I.C.U. in Omaha terrified that Natalie, my 17-year-old daughter, might die, I know what I’m talking about. I tell the nurse that Natalie needs to get another slug of intravenous fluids, and fast.
The nurse says she’ll call the doctor. Fifteen minutes later I find her in the lounge at a computer, and over her shoulder I see a screen full of makeup products. When I ask if we can get that fluid going, I startle her. She says she called the resident and told him the vital signs, but that he thought things were stable.
“He said to hold off for now,” she says.
“Get me two bags of saline. Now,” I tell her.
She says, “I’m calling my supervisor,” and she runs out of the lounge.
. . .
I know I shouldn’t be my daughter’s doctor. They taught us the problems with that during my first week in medical school.
. . .
But right now, I don’t care about any of that. I’m the one with experience taking care of really sick patients, and if I know she needs more fluids, she’s going to get them.
I break into the crash cart, a box on wheels full of stuff they use to resuscitate patients. I pull out two liters of saline solution and run both into Natalie’s IV in less than 20 minutes. Natalie’s pulse slows and her blood pressure rises. An hour later, after the nursing supervisor and on-call resident finally arrive, I’ve finished infusing a third liter. Natalie finally looks better.
This wasn’t the first time during Natalie’s illness eight years ago that I broke my promise to just be her dad. It started a week earlier when she came into the den and showed me the blood she’d coughed up. I suspect a father without my experience might have chalked it up to flu. Maybe because I was a transplant surgeon, and always considered the worst possible cause whenever a patient had a hiccup, I took her to the hospital. I was worried the blood meant she had a bacterial pneumonia, a bad one. And it did.
On the way to the hospital, Natalie took a deep breath and looked at me. “Am I going to die?” she asked. I’m convinced that she would have been dead before morning had I not been a doctor, and one who could recognize septic shock when it affected a normal teenager.

For the full commentary, see:
BUD SHAW. “A Doctor at His Daughter’s Hospital Bed.” The New York Times, SundayReview Section (Sun., SEPT. 6, 2015): 7.
(Note: ellipses added.)
(Note: the online version of the commentary has the date SEPT. 5, 2015.)

The commentary quoted above is adapted from the book:
Shaw, Bud. Last Night in the Or: A Transplant Surgeon’s Odyssey. New York: Plume, 2015.

“How You Gonna Keep ’em Down on the Farm”

Wikipedia tells us that the song “How Ya Gonna Keep ’em Down on the Farm (After They’ve Seen Paree?)” was popular after the end of World War I.

(p. C6) Dick Cavett, a son of Nebraska, used to ask (quoting Abe Burrows), “How you gonna keep ’em down on the farm, after they’ve seen the farm?”

For the full review, see:
A. O. SCOTT. “Off to the Stars, With Dread and Regret.” The New York Times (Weds., NOV. 5, 2014): C1 & C6.
(Note: the online version of the review has the date NOV. 4, 2014, and has the title “Off to the Stars, With Grief, Dread and Regret.”)

“In Nebraska, You Don’t Have to Die to Go to Hell”

A 1939 entry from Don Hartwell’s diary:

(p. 300) July 10
The same clear, glaring sky & vicious blazing killing sun. Cane is about dead, corn is being damaged; it will soon be destroyed. Those who coined the phrase ‘There’s no place like Nebraska’ wrote better than they thought. In Nebraska, you don’t have to die to go to hell.

Source:
As quoted in: Egan, Timothy. The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl. Boston: Houghton Mifflin, 2006.
(Note: italics in original.)

Former Nebraskan Writes that Football Breaks the Soul

(p. C1) The poet Erin Belieu was born in Nebraska. It’s a place where, she once wrote,

football is to life what sleep deprivation is

to Amnesty International, that is,
the best researched and the most effective method
of breaking a soul.

Ms. Belieu got out, soul entirely unbroken. She’s spent the past two decades composing smart and nettling books of poems, beginning with “Infanta” (1995), which was chosen for the National Poetry Series by Hayden Carruth. I’ve admired her three previous books, but her new one, “Slant Six,” seems to me better by an order of magnitude. It’s got more smoke, more confidence, more wit and less tolerance for obscurity. Her crisp free verse has as many subcurrents as a magnetic field.

For the full review, see:
DWIGHT GARNER. “From a Slim Book, Many Observations.” The New York Times Book Review (Weds., DEC. 10, 2014): C1 & C4.
(Note: italics in original.)
(Note: the online version of the interview has the date DEC. 9, 2014, and has the title “From a Slim Book, Many Observations.” The name of the interviewer, presumably the author of the italicized passage above, is not given in either the online or print versions.)

The book under review is:
Belieu, Erin. Slant Six. Port Townsend, WA: Copper Canyon Press, 2014.

TransCanada Plans to Use Eminent Domain to Build the Keystone Pipeline

I am not opposed to the Keystone Pipeline on environmental grounds. But I have long believed that property rights should be defended, and that we too readily allow the violation of property rights through eminent domain.
If the Keystone Pipeline can be built without eminent domain, then I am in favor of allowing it. If it can only be built by violating landowners’ property rights, then I oppose it.

(p. 1A) LINCOLN — As the Republican leader in the U.S. Senate pledged quick approval of the Keystone XL pipeline early next year, final offers were landing Tuesday in dozens of Nebraska mailboxes.

TransCanada Corp. said it mailed new offers of right-of-way payments this week to more than 100 Nebraska landowners who have refused to sign an easement contract.
The letters also say the company will pursue eminent domain against landowners who don’t agree to terms by Jan. 16. The company says Nebraska law requires condemnation proceedings to start within two years of the state’s approval of the pipeline route, which occurred Jan. 22, 2013.

For the full story, see:
Joe Duggan. “TransCanada sends final offers to 100-plus Nebraska landowners.” Omaha World-Herald (Weds., DECEMBER 17, 2014): 1A & 3A.
(Note: the online version of the story has the title “Keystone XL pipeline: TransCanada sends final offers to 100-plus Nebraska landowners.”)

HR Regulations and Fear of Lawsuits Keep Managers from Firing Workers Who Do Not Work

(p. 1B) The biggest problem in your workplace has a name. His name is Jeff. . . .
Jeff sits two cubicles down from us, or three, or four. His real name may be John, Juan or Joan. He gets to the widget factory late, he leaves early and always mucks up his part of any group project. He complains, loudly, about the smallest things, and when you bring doughnuts for your birthday he probably takes three and then talks with his mouth full, too.
. . .
(p. 2B) . . . , morale suffers greatly when most of a company’s employees perceive that their supervisor is failing to deal with their low-performing co-worker, month after month, year after year.
For this, Hoogeveen blames a corporate culture that is so concerned about HR regulations, and the often-imagined threat of litigation, that bosses often fail to take into account how the trouble employee affects the larger climate.
. . .
. . . if Jeff doesn’t improve, he needs to be fired. This is perhaps the worst part of a boss’s job, Hoogeveen thinks. His eyes mist as he recalls firing an employee whom he liked, but who was simply a bad fit at QLI.
It’s human nature to avoid this conflict, to maintain the status quo and let Jeff be, he says. That’s what can and does happen at most Omaha companies.
But it’s bad for the employees, and it’s bad for business.
“A lot of this stuff is incredibly easy to understand,” says Omaha’s workplace mechanic [Kim Hoogeveen]. “It’s incredibly difficult to live.”

For the full story, see:
Hansen, Matthew. “Workplace Guru: Don’t Let Problem Worker Slide.” Omaha World-Herald (Mon., July 21, 2014): 1B-2B.
(Note: ellipses, and bracketed name, added.)
(Note: the online version of the article had the title “Hansen: Don’t let Jeff — the problem worker — slide, workplace guru says.”)

Warren Buffett Lately Low on Alpha

(p. 3) Warren Buffett is probably the most famous investor of his generation, and for good reason: His track record over the long term is a thing of beauty.
He has beaten the market by a wide margin over 49 years, a record so impressive that it’s used in finance classes as a textbook example of “alpha.”
Alpha is an elusive quality. Very simply put, it is the ability to beat an index fund without adding risk to a portfolio. Investment managers are always seeking it. If it exists, Warren Buffett surely has had it.
A new statistical analysis of Mr. Buffett’s long-term record at Berkshire Hathaway has just been done, and it’s come up with some fascinating insights about his abilities, past and present, and about the chances that the rest of us have for beating the market. Using a series of statistical measures, the study suggests that Mr. Buffett has indeed been blessed with an impressively big dose of alpha over a very long career.
But it also reveals something that isn’t impressive at all: For four of the last five years, Mr. Buffett has been doing worse than the typical, no-frills Standard & Poor’s 500-stock index fund — so much worse that it’s unlikely to be a matter of a string of bad luck. Mr. Buffett has begun to behave like an investor with no alpha at all.
. . .
A vast majority of individuals, including most people now working in finance, do not have alpha, Mr. Mehta says. It doesn’t matter whether they have studied finance or have prodigious math skills; the statistics show that they are unlikely to have the ability to beat the market.
That has a serious implication for individual investors, he says: True investing skill is so rare that the rest of us shouldn’t even try to emulate those who have it. In addition, he says, we probably shouldn’t bother trying to hire the few outperformers to invest our money. Why? Because we aren’t likely to be able to identify them.

For the full commentary, see:
JEFF SOMMER. “Strategies; The Oracle of Omaha, Lately Looking a Bit Ordinary.” The New York Times, SundayBusiness Section (Sun., APRIL 6, 2014): 3.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date APRIL 5, 2014.)