Dollars & Sense
Oregon's top financial advisors help plan your investment strategy By Jim Pasero
BrainstormNW introduces you to four of the
most influential individuals in Oregon’s financial community. Each
plays a different role in the business of money, and each offers a unique
perspective on the future of the region’s economy.
Pat Becker Jr.
Tracking the region’s top tech companies
Pat Becker Jr. remembers getting a call on his cell phone last year from
a friend who works for Nike.
“He told me,” says Becker, “‘I’m sitting
here in a bar in China, and I’m watching you on television.’”
His friend was watching “Bloomberg News,” where Becker has
appeared regularly for the last several years as an analyst for the region’s
The idea that hotel lounges in China are tuned to “Bloomberg News”
shouldn’t be a surprise. “Bloomberg” is, arguably, the
world’s most connected financial news service with more than 1,600
reporters covering the world’s finance centers 24/7.
Becker’s resume is equally impressive. In addition to appearing
on “Bloomberg News,” his analysis appears on Bloomberg.com,
and he is regularly quoted on CNBC’s Jim Cramer’s TheStreet.com.
The 40-year-old Portland native is vice president of Becker Capital Management,
a local wealth management company with 28 employees that specializes in
both individual and institutional accounts. When he’s not tracking
the region’s technology companies, Becker is helping manage the
firm’s portfolio that includes more than $2.5 billion in assets.
“I cover hardware and software companies, and also the semiconductor
companies: Intel, HP, Microsoft, Mentor Graphics, RadiSys, TriQuint, FEI,
and Pixelworks,” explains Becker. Becker Capital currently owns
positions in Intel, Microsoft, Lattice Semiconductor, and Mentor Graphics.
“I appear on the stocks they have me pegged for. I comment on HP
and Intel and make general technology comments. My commentary is centered
around quarterly earnings. They have me on after Intel reports—to
get insights from someone who owns some shares and what they are thinking.”
In November 2004, Becker debated a hedge fund manager on “Bloomberg”
who was short HP, versus Becker who had a long position in HP. “‘Bloomberg’
likes to have analysts on who actually own shares in a particular company.
They want their commentary to be from the buy side.”
So with all Becker’s experience, you’d think analyzing a
30-page quarterly earnings report would be a breeze for him. “It
depends on the size of the company,” explains Becker. “Who
it is matters. If they missed their earnings by a big margin it will attract
more people on the conference call. These calls can last for hours. The
calls I sit in on are a combination of stocks we own, stocks we are looking
at, and companies that are competitors to ours.”
Appearing on international financial television doesn’t come without
pressure. “It can be nerve-racking in that you get a press release
from a company like Intel, and there’s a lot of detail that happens
on conference call. You are going through a 30-page financial release,
and then you’re going on live TV right after to talk about it. That
will set anybody’s heart beating.”
Becker doesn’t just rely on quarterly conference calls to analyze
the technology sector. “We track the number of companies that we
see face-to-face. We don’t do conference calls so much, everybody
does that. What makes Becker Capital unique is that we focus on research,”
he says. And that means lots and lots of travel. “We see over 500
companies a year face-to-face.”
The change in communication technology has allowed Becker, and other
researchers, to keep up to date to with so many companies, so often. “Technology
for our business has improved dramatically in the last six or seven years.
We can go online and see financial statements, SEC filings. We pay a service
that emails us when a company files a 10Q report, has an insider transaction.
When we are on a conference call we get a transcript of what they are
saying as they speak.
“Portland has a very good investment community on the institutional
side,” says Becker. He sees the city as an emerging West Coast financial
center. “When companies come around and do road shows, they know
Portland has a very good small cap community. We have Mazama Capital which
has six billion under management, there’s us, Tygh Capital, Ferguson
Wellman, and others.”
Becker knows that Portland isn’t the finance center that San Francisco
is. “We don’t have their resources,” but he’s
proud to see an emerging cluster taking root in his hometown.
Ambition and community service fuel the region’s
“Not many people remember who their high school graduation speaker
was,” says 75-year-old Portland stockbroker and Gresham High grad
Rod Moore. “1948 was the year of the big primary in Oregon—Dewey
vs. Stassens. We had both of them at our high school.
“Our graduation speaker was Harold Stassens. He was the boy wonder
governor of Minnesota, elected at age 31. Dewey beat him in the Oregon
primary.” The following fall, President Truman would defeat Dewey
in a historic presidential upset, but Dewey would carry Oregon.
If Rod Moore can remember who his high school graduation speaker was,
it is not surprising because he has been pretty focused on three things
in his life—his family, his business and his community.
Two of his focuses, family and business, merge every day. Moore teamed
up with two of his children, Greg and Laurie, 25 years ago and today they
manage more than $160 million in client assets at the firm of Wedbush
Morgan Securities, which they recently joined.
Additionally, Jim Moore, Rod’s other son, worked in the family
brokerage business for almost a decade before attending medical school
at OHSU and becoming an anesthesiologist at St. Vincent’s.
For much of their careers the Moore team worked at the firm of Adams
Hess Moore & Company, of which Rod Moore was the president. In 2000,
the firm merged with Strand Atkinson Williams & York, a subsidiary
of Umpqua Holdings Corporation.
One of the reasons Moore and his family have been one of the area’s
most respected names in the industry has to do with his own understated
style. “I was honest, and I was a low pressure guy,” says
the Korean War veteran and OSU graduate about his success.
Moore enhanced his reputation through decades of public service. “I
didn’t play golf,” says Moore good-naturedly, “I did
community service.” And lots of it.
Moore was on the Beaverton school board for ten years, president of the
Oregon School Board Association, and president of the Western School Boards
Association, a region that reaches from Alaska to Hawaii. Beyond school
service, Moore and his wife Jean have been longtime leaders at the Washington
County Historical Society, and he is a past president of the Beaverton
Moore, who now sits on the board of Reser’s Fine Foods, is bullish
on the country and our area but worried about how negative media can be,
both nationally and locally, in particular the Oregonian. Moore believes
the reason the market hasn’t done as well as the economy in recent
years Moore believes “is because there has been so much negative
information about the country and its policies, and its business facility.
People slow up their investments, sit back and wait for something to happen
and the whole process slows down.
“If you go by the daily paper or six o’clock news, you will
not be successful because every day there are several reasons you should
not invest. ‘Not today, sonny. You shouldn’t invest because
things are going to hell quickly.’ I can go back to guys I called
on the first day I was in the business who told me, ‘Well, the government
has too much debt. We can’t go anyplace anymore, and there are all
kinds of government problems.’ Well, those problems are still there,
but we certainly have done well during that time. We have been a very
‘given’ generation. We have probably been given more by God
than we deserve.”
But Moore insists you’ve got to have the right conditions to make
people happy. “It takes a while. You can’t turn the ‘bellyachers’
into ‘smilers’ over night, but once they get going…the
key is to have the economy moving fast enough so that raises in payroll
and such benefit everybody up and down the line. The expansion needs to
be a long enough period to get everybody involved. Short, choppy swings
don’t help poor people because they can’t move fast enough
to get in and out of choppy markets.”
Currently, Moore likes the looks of energy stocks: “[They] have
been good performers and will continue to be.” He also favors stocks
of companies that have no contractual problems with unions and those in
the electronics and medical industries. Moore is especially interested
in following medical companies involved in new DNA research. When you
follow the medical industry, says Moore, “what you see are people
imbued with the spirit to develop new technologies. It is very interesting.”
As for Northwest companies, one of Moore’s historical favorites
has been Nordstrom. “Nordstrom started out as a little shoe shop,
but it has done the kind of thinking that has brought them to the top.
Nordstrom has gone through cycles—the changing of dress, personal
tastes. They have had a couple of hiccups and landed not quite in the
right position. They have had to slow down and straighten it out, which
they have been very good at doing.”
In spite of the last several years of a mediocre economy, Moore remains
bullish on the region’s future. Fairly bullish. “I am optimistic
because I know the system can work well. We have the people, the climate,
the raw materials, the ambition. Put all those things together and it
will be good for all of us.” Moore’s confidence in the future
comes from his own past experience. “I have always done better than
I expected to do. Everybody should be positive, expect to do well, and
then if you do better than that, great.” And that’s what happened
But Moore knows that confidence in the future doesn’t come without
a price, and that price tag is lots and lots of community service. “Each
of us as individuals have responsibilities. The country and world won’t
work unless we are aware of what is going on around us. We need to be
aware of what’s happening in our community and how to improve it
on the basis that it will be better for everybody. That’s the attitude
I think everybody has to get in on.”
From Main Street to Wall Street and back again
There probably isn’t a person in Oregon who has a broader perspective
on business, and what it might take to solve Oregon’s economic problems
than former Oregon state treasurer, William Rutherford.
There was a time when the 67-year-old Rutherford was on the fast track
to be governor of Oregon. His life has taken many turns: He grew up in
McMinnville; attended the University of Oregon; graduated from Harvard
Law school; served in the military; lived in Europe for two years; returned
to Portland to run a financial firm; held a seat on the Pacific Coast
Stock exchange; returned to McMinnville after his father’s premature
death to run the family retail business (13 retail stores in McMinnville
and the upper Willamette Valley); was elected several times as the community’s
representative to the Oregon legislature; and in 1984, during Governor
Atiyeh’s last term, was elected Treasurer of Oregon. He was later
elected Chairman of the Oregon Investment Council, managing the state’s
$14 billion PERS retirement fund.
The sudden shift in 1970 from the world of finance to running the family
business was never seen as a sacrifice by Rutherford. “I loved the
retail business. I grew up in retail, and I enjoyed the practice of law.
We had a bucolic, a lovely life on the 20-acre farm. It was good place
to raise kids, and I always loved McMinnville,” recalls Rutherford.
“I was the president of the Chamber of Commerce, chairman of the
downtown redevelopment commission, and people said I should run for the
legislature in ’77.”
Then after a decade in politics, Rutherford made another change. He turned
away from his political career and moved to New York City. For Rutherford,
the decision to change was the most difficult of his life, but he had
a son admitted to Stanford and a daughter admitted to Yale.
“I went into the Treasury office, and my first year salary was
$42,000. I was being paid less than municipal court judges. The tuition
for my children was almost as much as my take home pay. As much as I enjoyed
public life, it becomes such a financial sacrifice that you can’t
justify it any longer. People were upset that I left, but I had no choice.
As much as I love the state, I had a duty to my children, and the duty
to my children came first,” says Rutherford, who was a single parent
for much his children’s lives.
So after eight years on Wall Street and with his financial future secure,
Rutherford decided to move back to Oregon in 1994 with his new wife, Karen
Anderegg, the former president of Clinique and editor-in-chief of Elle
magazine. And for most of the last decade, Rutherford has been managing
assets for private accounts.
Today, Rutherford manages about $25 million in assets for about 25 clients,
with the help of only one employee. “We grew the portfolio by nearly
20 percent last year,” says Rutherford, “and we added a number
of new clients.”
“One of the real advantages in my life,” says Rutherford,
“is that I operated stores on Main Street and then went to Wall
Street and saw how the global economy worked. Our firm had money in 22
international markets. I was chairman of a NASDAQ-traded company, and
I also had a principal role in the turnaround of Europe’s 10th largest
“My broad experience has given me a tremendous amount of information—a
tapestry to make my investment management better. I see and understand
trends better than most, and that enables me to make good stock selections,
which is why our portfolio returns are as strong as they have been.”
Rutherford’s business now is the business of separate accounts,
creating personalized funds for individuals. Morningstar, a database service
that rates separate accounts for Barron’s magazine, has recently
given him a 4-star rating out of five.
Lawrence Strauss of Barron’s writes about this booming industry
in their February 20 cover story: “Separately managed accounts are
one of Wall Street’s hottest products. Reason: They can be adapted
to an individual’s needs and cut taxes, too. In the financial world,
think of the typical mutual fund as your friendly, neighborhood diner
and the separately managed account—one of America’s fastest-growing
but least understood investments—as Chez Panisse.” These accounts
resemble mutual funds, but with some key differences: The minimum is usually
much larger than required by a fund; the fees are generally higher; and
separate accounts provide direct ownership in the securities in their
portfolios. In contrast, a mutual fund investor buys a stake in an entity
that owns a basket of stocks or bonds.
Separate accounts let a manager make custom accounts for individuals—something
in which Rutherford excels. And it’s not just Morningstar that has
noticed. InvestorForce rates Rutherford among the top five percent based
on ’05 performance. And Informa Investment Solutions ranked Rutherford
the seventh best All Cap Growth manager during a three-year period from
Rutherford’s ability to see trends isn’t limited to stocks.
He has also seen a trend in the economic condition of the state of Oregon
in the last decade that worries him.
“When I moved back here in ’94, I was calling my friends
in New York. I told them that there was more money being invested in Oregon
right now than Taiwan was investing in China. It was unbelievable because
it was a state that was still under three million people.” And in
Rutherford’s mind, this was a tremendous opportunity for Oregon.
“Oregon has always struggled because it is a resource-based state,
and we have been, in effect, a colony of California and other states that
extracted resources from us. Later we developed technology, which gave
us a more diversified base. Oregon has never been as prosperous as it
was in the late ’90s, at least not in my lifetime.
“In the ’90s Oregon did have a lot of money. We did have
a lot of prosperity, but state government failed to invest in the infrastructure
that would carry us beyond that economic expansion, by that I mean in
schools, roads, highways, and our parks,” explains Rutherford. “The
money was simply spent and gone, and now it is absolutely gone. Where
did the money go? Drive West Burnside and it is nothing but potholes.
You’d think you were in Baghdad.
“There is no leadership in the state taking us into the global
economy, and Oregon is sinking into emerging country status,” laments
And he is skeptical about the state’s investment in light rail.
“A train has got to work. Period. If you lived here before the transit
mall was put in and saw how vital those downtown stores were—and
busy, yes, that’s the merchant in me talking. People walking by
your front door is what makes businesses work. Now we have street traffic,
jugglers, and the businesses are dying.”
Beyond transportation, Rutherford sees taxes as a major hindrance to
prosperity. “Our tax situation is very discouraging to business,
and now the mayor of Portland has proposed more taxes. I said when I was
in the legislature that people actually have choices, and that they can
move those businesses.
“It’s not much different than the corner dry cleaner. If
you’re not getting good service or if the price is too high, you
will probably go to the other dry cleaner. And in this state we see it
between Oregon and Washington. With the amount of people moving to Clark
County…we built Clark County. The people at the top in Oregon clearly
don’t understand that additional taxes are discouraging to business.
We have such an anti-business bias in Oregon, not just from the government,
but, frankly, I would put the Oregonian in that category.”
Rutherford believes that the state needs a sales tax but is skeptical,
like many others, that it can be achieved in Oregon. Having a sales tax,
he believes, is absolutely critical to competing in the global economy.
But until a sales tax happens, he has another suggestion—resuscitate
a law he got passed in the legislature in the late 1970s that says income
tax brackets in Oregon be indexed. The law was deferred for two years
and later repealed, or it would have had a major impact today.
“If we went back to the proposal I passed in 1979 to index income
taxes, even if we started this now, it would be helpful,” says Rutherford.
“It is a small start, but it would set a tone that we are now starting
down a path to make some drastic changes. Government itself has to be
more efficient, more responsive to business.”
Rutherford thinks that if Oregon could change its tone it could become
a finance center on the West Coast…and a telecommunications center,
and a food center, and a natural resource center, as well as continuing
to be a footwear and outdoor apparel center. But growing these industries
will take a different mindset by the government.
Rutherford tells an anecdote, which he believes describes the sentiment
here all too well. “When Nike got big, they got trashed by state
and local government,” starts Rutherford. “They were practically
trying to run Phil Knight out of town. Karen and I were flying back to
New York all the time, and we used to get off the plane and see the latest
Oregonian, which would have an anti-Nike headline. It was a joke…we
would say to ourselves, ‘What are they after Nike for today?’”
Rutherford, for his part, wants only the best for Oregon, but until anti-business
sentiment changes, he will pass the time growing clients’ separate
accounts by a whopping 20 percent a year.
Green is good: Environmentally and financially
Chet Paulson, founder of the Portland-based and NASDAQ-traded Paulson
Capital Corporation (PLCC), has always been forward looking – consider
the time twenty years ago when he put up the seed money to start cable
television’s Financial News Network, the precursor to CNBC.
“I had done an IPO for a small motion picture company in Atlanta,”
says Paulson, “and a couple of guys in L.A. saw the offering. They
had a studio in Santa Monica that did children’s shows. We were
having an ongoing dialogue about narrow casting, what was going on with
Ted Turner, how TV was changing and about a Channel 22 (KWHY-TV) financial
program based in L.A.
“They wanted me to finance their children’s programs,”
continues Paulson, “but I didn’t think that was for us. But
the one guy was just a promoter, and he hated to give up this potential
source of funds. He said to me, ‘Damn it, Chet. Is there anything
you will raise money for?’ and I said, ‘Yes, if we took Channel
22 national and did it really first class and made it a real financial
news network, I would be interested in that.’
“And that’s what we did. FNN was based in Santa Monica. The
first money in was ours and then Merrill Lynch came in. We ran advertisements
on FNN. For our firm, it was great. It just made sense because the narrow
casting thing made sense to me. I believed it would be of interest to
others in the financial community. We were pretty much right on.”
In 1982, with Paulson’s crucial funding, FNN began running 12 hours
of business programs every day across the nation. The station lasted for
more than a decade and was replaced in the 1990s by CNBC, a cable of affiliate
Today, Paulson Investment Company, a wholly-owned subsidiary of Paulson
Capital Corp., is the Northwest’s largest independent brokerage
firm, with 2004 revenues of more than $32 million and offices in a dozen
states. Last year, the Seattle Times rated Paulson Capital Corporation
the ninth best publicly run company in the Northwest. The company annually
hosts the Westergaard Smallcap Conference in November at the Waldorf-Astoria
Hotel in New York City. Last year, CNBC’s Larry Kudlow keynoted
this prestigious event.
But there’s a lot more to the company than buying and selling stocks
and bonds. Paulson Investment Company is also the national leader in public
offerings of small cap growth companies, and this is the area that Paulson
has been specializing in for more than thirty years.
“We really have established ourselves in that niche,” says
Paulson, who is a graduate of Portland’s Franklin High. “In
our area of expertise we are one of the top two or three, if not the top,
in doing small public offerings. We’ve done it for a long time,
made lots of mistakes, and we’ve had a lot of big winners.”
Some of his big winners in the last ten years are Cree Research (technology),
AVI BioPharma (biotechnology), Evergreen Resources, GMX Resources (oil
and gas), and Charles & Colvard (consumer).
“We see 100 deals for every one that we do. We see a lot of people,”
says Paulson about the research and work that goes into choosing the projects.
“We recently went to a conference in Newport Beach, a one day meeting
of the Southern California Investment Association. There were a hundred
investors there. Seventeen companies gave presentations. Two of the best
presentations were our companies. They were very well received.
“Early money is the hard money. Identifying the winners early is
harder than later on, but that is where we have a value added component.
We do small public offerings, and we do it on an economic basis,”
That may be why his company is sought after these days. “If you
want to get a deal done come see us, because if we decided to do it, it
will happen. We have a reputation of somebody who can really [raise capital]…now
we may value your business a little more conservatively, but when we say
we are interested in how the investor does, we mean it. We try to do a
little blocking and tackling for the benefit of the investor. The guy
who has to do well is the person who writes the check, sometimes they’re
Paulson guides his team of analysts in judging the hundreds of deals
that come across their desks. “We like proprietary technology,”
says Paulson. “We prefer to look at something that really has big
opportunities. We’ve always had a national focus. We are not industry
specific. We are not limited by geography. We take on companies that are
too small for a major investment bank to do, except on a private basis.
So we identified a segment of the market where we had no competition.”
These days Paulson is focusing his considerable talents in foresight
on environmental issues. “A couple of years ago we made a commitment
to green companies.” Paulson says his commitment came from the book
“The Hydrogen Economy” by Jeremy Rifkin. That book led to
his company doing an IPO for a solar energy company based in California
called DayStar Technologies.
“In the early stage we thought we would take the offering to Europe
and knock their socks off because they were ahead of us on the green economy,
but we got a big yawn. It took everything we had to get it done.”
DayStar went public in February 2004.
But times change quickly and a couple of years have made a big difference
in investment opportunities for green companies. “Now three or four
of our five most recent deals that we are doing are for green-oriented
businesses. We are now seeing what we were looking for two years ago.
“People come to different conclusions at different times,”
Paulson says, explaining his interest in an industry about which many
remain skeptical. “When I read Rifkin’s book, it became evident
to me that, first of all, we are creating a lot of environmental problems
and that someone is going to have to solve all those problems. So who
is going to be?
“Well, it’s going to be mostly small businesses with the
help of government to provide funds, and to provide special laws and legislation
to nurture some of these companies. But, by and large, like anything else,
if we are going to have a solution, it will be small and medium-sized
businesses that are going to find it. And in finding these solutions,
there will be enormous opportunity.”
Paulson’s green strategy plays well into the recent declaration
by the President that Americans are addicted to oil. “It was good
to hear that the President was aware of the problems, but we are not going
nearly far enough. In my opinion what we need in the President and in
the Congress are people who really understand what these long term problems
are and address them in a more dramatic fashion.”
One of the problems Paulson is referring to is global warming. “There’s
an accumulation of data points to indicate that it is actually happening.
It is kind of scary, because once you get something like this started
in the world how does it stop?
“Progress will be in fits and starts,” says Paulson about
the technologies—ethanol, hydrogen, natural gas—that may lead
the U.S. to independence from Middle East oil. “It will be a crazy
quilt blanket of technologies. What happens in one depends on what happens
in another. But we ought to take this phrase ‘energy independence’
and find a way to get there as quickly as we can. It would help us not
only environmentally, but we wouldn’t need to be so active in the
For Chet Paulson encouraging green companies is just a natural extension
of his fascination in solving problems through helping productive companies
get started. There’s seldom a dull moment. “There are a lot
of nuances, subtleties to this business, and the thing I am always amazed
at, as many transactions as we have done, that there are still things
that happen that you just can’t believe. You are always problem
solving because you never get it exactly right, but that is part of the