The Anna Maria Island Sun Newspaper

Vol. 10 No. 35 - June 2, 2010


LaPensee’s pool division grows

Anna Maria Island Sun News Story

Tom Sanger has just earned his commercial contractor’s license
for pools and spas, which includes construction, repair and
maintenance on commercial and residential pools.

HOLMES BEACH – Tom Sanger, pool service manager at LaPensee Plumbing, started with one account three years ago and now oversees 200 accounts and three technicians.

Sanger continues to grow with the company and has just earned his commercial contractor’s license for pools and spas, which includes construction, repair and maintenance on commercial and residential pools.

“I’ve been doing this since I was 12 years old,” he recalled. “My family owns Galaxy Pools in Sarasota. Greg (LaPensee) and I are friends, and he convinced me to come here and start a pool division.

“I started with one account and it has grown to what it is today with accounts on the Island, in Bradenton and on Longboat Key. I couldn’t have done it without the help of the LaPensees. This is a tight knit, family oriented company.”

The division’s technicians are all certified at the commercial pool level and live on the Island. They wear uniforms to enhance their professionalism.

“I’m like Greg. We love the Island and want to create a service company that’s there for Island residents,” Sanger said. “Our response time is with in a day and sometimes within an hour and we have 24-hour emergency service.

In addition, the division offers pool chemicals and supplies and Sanger pointed out, “We match prices you can find in town because we want to be competitive.”

Sanger and his wife, Chinda, live in Holmes Beach.

Anna Maria Island Sun News Story

Volatility – friend or foe?

Investment Corner

In my column two weeks ago, I discussed the concept of expecting financial markets to be uncertain and to learn how to capitalize on volatility rather than being a victim. Of course, the idea for that article was primarily the very sharp intraday market drop that occurred on May 6, which is now known as the “flash crash."

Of course, it was not really a market crash other than the unusual magnitude of the move within one trading day, since the prices recovered the majority of the losses by the end of the day. Volatility has persisted throughout the month of May, and I suspect it may be with us for a while longer as nervous investors choose to either take advantage of dips in prices to buy or to take advantage of rises in price to sell and get some relief from the mental duress they may be under.

When extreme bouts of volatility hit the financial markets, it is generally at times when investors are fearful. Because we react more to the fear emotion than to rational moments or greed, the extremes of fear can be measured by monitoring trading activity and the related details such as price and volume. I won’t get too technical, but wanted to share the chart below of the S&P 500 Volatility Index. The S&P 500 is a widely used measure of stock market activity, and the index itself is composed of the 500 largest corporations by worth in the U.S.

If you note the times in the last 20 years when the Volatility Index reached peaks in the 35 – 40 range or above, they were generally great times to be accumulating equities for gains in the next one to three years. But, of course, these are the times when most investors are running for the bomb shelter and staying away from investing in stocks.

The table below lists gains for the S&P 500 index (not including dividends) from the approximate peak in the high volatility range for the following 12 months:

10 / 1990 - +59 percent
10 / 1997 - +20 percent
09 / 1998 - +26 percent
09 / 2001 - -21 percent
10 / 2002 - +18 percent
10 / 2008 - +20 percent

The average gain in the year following a volatility index spike to near 40 or above is 20 percent (not including dividends) and five out of the six cases were positive returns. The one loser was the volatility spike occurring as a result of the terror attacks on 9/11, an exterior shock which occurred before the stock market correction from the Dot. Com and technology stock bubble had fully run its course.

It is also worthy to note that the spikes in volatility did not mean the market had bottomed yet. Particularly in 2002 and 2008, the market proceeded lower before finally moving significantly higher in 2003 and 2009 respectively. The message here is one of seizing opportunity when others are fearful, a behavior exhibited by many successful investors. But, one should never lose sight of a common sense investment plan and in no way should the content in this article be taken as an exact timing mechanism. As identified above, patience may be required before gains are realized.

Tom Breiter is president of Breiter Capital Management, Inc., an Anna Maria based investment advisor. He can be reached at 778-1900. Some of the investment concepts highlighted in this column may carry the risk of loss of principal, and investors should determine appropriateness for their personal situation before investing.

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