Tuesday, May 22, 2007

Old Pittsburgh Stocks

I was going to end the political cycle by assessing the performance of the New Pittsburgh Stock Exchange (the answer is so so)... I will get back to that, but for a token post that sticks to the knitting I would mention some real Pittsburgh stocks.

Sam got me discussing last week how some Pittsburgh stocks are doing. This is no secret of course, but the stock of venerable US Steel is up more than 11 fold, or technically 1123% as of a few minutes ago from its nadir in March of 2003. That's a pretty phenomenal rate of return. A fun, but mostly meaningless comparison: Microsoft is up ~12% over that same period. If ownership of US Steel were still concentrated locally, the $10 billion or so increase in market capitialization could be a windfall for a lot of local investors. Unfortunately, ownership of US Steel has long since diversified widely. Today it has a broad ownership including a lot of institutional ownership. So compared to say a big IPO of a relatively new firm which creates a lot of new wealth seeking projects for re-investment, I don't see much in the way of new steel millionaires around town affecting the local investment climate. Some are out there I am sure, but just no elephant in the china shop.

Is US Steel the lone exception that proves the rule? It turns out that the Bloomberg Pittsburgh Index of local stocks is doing rather well over the last year. Do I expect the old Pittsburgh Stock Exchange to be restarted anytime soon? Not really, but given the ever increasing price of oil, imagine if the Pittsburgh Oil Exchange had remained here.


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