BEN NEARY Associated Press writer | Posted: Thursday, October 9, 2008 12:00 am
CHEYENNE - State Treasurer Joe Meyer and some of the state's financial advisers say Wyoming has a well-diversified investment portfolio and is in a better position than most other institutional investors to ride out the turmoil on Wall Street.
Meyer and the state's other four statewide elected officials met Thursday as the State Loan and Investment Board. Meyer emphasized that Wyoming's nearly $11 billion portfolio is one of the most diversified portfolios in the nation.
"Go fishing," Meyer told the other officials. "We're set up for the long term, so quit fussing about this."
Michael Walden-Newman, the state's chief investment officer, said the book value of Wyoming's investments has declined nearly $275 million - from roughly $10.9 billion to just over $10.6 billion - from the start of the present financial crisis through the end of September. He said he didn't have figures on the declines so far this month.
R.V. Kuhns and Associates, an Oregon company, advises Wyoming on its investments. "We've had a decades worth of movement within the last six weeks," said Josh Kevan of the company. He said domestic equity markets are down about 30 percent so far this year.
"You're losing money, but you're losing less than the average pension fund," Kevan told the state investment board.
Meyer said that the Wall Street brokerage houses that have been failing have typically leveraged their assets by ratios of more than 20-to-1. He said they took huge risks to increase profits, but couldn't afford to cover their bets when faced with declining markets.
Becky Gratsinger of R.V. Kuhns said about 10 percent of Wyoming's portfolio involve investments in entities that were involved with leveraged positions.
Meyer said Wyoming gets about $500 million a year in new cash that's earmarked for permanent savings from mineral production in the state. He said the state's portfolio now is heavy on cash, and said it needs to find places to invest it.
Gov. Dave Freudenthal said Wyoming is in a position where its portfolio is pretty safe. He said the state is riding the market down, "and hopefully someday, we'll ride it back up again."
And Freudenthal said that given its healthy cash reserves, Wyoming has the opportunity to look for bargains in the market and pounce on them.
Freudenthal said he wants the state's money managers to act like famous investor Warren Buffett "and look for the wounded and not the dead."
Dave Johnson, executive director of the Wyoming Bankers Association, told the board that Wyoming banks are in an unusually strong position compared to banks elsewhere.
"Wyoming is on thick ice," Johnson said, adding that many of the state's bankers lived through the lean times of the 1980s and learned the hard way not to make risky loans. "As long as our economy is good, our banks will do good."