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How my index of county companies made an impact | Taking Stock


Last updated 6/7/2017 at Noon

I have been tracking Snohomish County companies since 1994, when I began the Abarim Snohomish County Stock Index.

The index was a conscious attempt to publicize Snohomish County companies. We live in a Seattle-centered economy, and I believed that our county’s companies were being lost in the buzz about growing Seattle and eastside companies.

I stopped calculating the index on June 30, 2010. I stopped because I thought that no one was paying attention. I also stopped because we had lost all four of the local banks in the index, and some of the biggest non-bank companies. That made it more difficult to calculate a meaningful index. If no one was paying attention, why spend the energy?

I also had offended local business leaders, including the newspaper in which my articles often appear, because I had been questioning Boeing's accounting of costs for the 787. I admit that I felt justified last year when the Securities and Exchange Commission publicly began an investigation into 787 accounting.

I stopped calculating the index, but I kept my spreadsheet of Washington companies. I had been building it since 1991.

Notable events for Washington occurred on Nov. 12, 1991, when Microsoft passed Boeing in market capitalization and became one of the 30 most valuable companies in the country, and on Jan. 20, 1993, when Microsoft passed IBM in market capitalization. The impact of that report literally went around the world. Market capitalization is calculated by multiplying the value of one share by the total number of shares.

After explaining market capitalization, I should mention that Microsoft passing IBM was a bit contrived. I worked with Greg Heberlein of The Seattle Times on a what-if scenario. What if all the stock options that were in the money for Microsoft and IBM were exercised? In that situation, Microsoft would find itself more valuable than IBM.

There was an unfairness to the scenario because Microsoft shares had consistently gained in value and all existing options were in the money. IBM shares had been in a long decline, losing nearly three-fourths of their value, and none of the IBM stock options were in the money.

I know I didn't expect the article to be more than a fluff piece. I think Greg expected the same. I know I was surprised – and I think Greg was surprised, too – when The Times regarded our little effort as front-page material.

What was worse – or better, depending on your point of view: it was a big news day. There was a massive windstorm that caused considerable damage; Bill Clinton was inaugurated as the first Democratic President in a dozen years; Joe Albertson died; Audrey Hepburn died; and U.S. bombers struck a target in Iraq – some things don't change.

Because it was a big news day, our bit of fun was edited. Three paragraphs were removed that explained our methodology, that this was a fun way of comparing the two companies. The headline was that Microsoft was bigger than IBM. That headline and story went around the world.

The question at that time was: will the operating system of the future be Microsoft's Windows or IBM's OS2? We now know who won. One of the problems for OS2 was a lack of application software to run on it.

Over the years following, I met a number of small software developers who told me that our unintended effort had been the key that caused them to develop for Windows instead of OS2.

This week’s column didn't go the way I expected it to go, just like that article. I had intended to ask readers to help identify any Snohomish County companies I might not be unaware of. I suppose I will ask that question next week.

Tim Raetzloff operates Abarim Business Computers at Harbor Square in Edmonds. What he writes combines his sense of history and his sense of numbers. Neither he nor Abarim have an investment in any of the companies mentioned in this column.


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