Books: May-June 2008

June 1, 2008

 

The Natural World of Lewis and Clark
By David A. Dalton '73

The Natural World of Lewis and Clark
By David A. Dalton '73.
University of Missouri Press, 2008.
264 pages. $29.95.

The Lewis and Clark expedition of 1804-1806 has rightfully captured the imagination of the American people. The well-chronicled saga, a journey into the unknown highlighted by perseverance in the face of adversity, marks the signature event in the opening of the American West. As vividly related in the journals of Meriwether Lewis and William Clark, it unfolded over magnificent landscapes of wide-open prairie, intimidating mountains and mighty rivers, and forests of huge trees.

Documenting the natural history of the land newly acquired through the Louisiana Purchase was a major goal of the expedition. In preparation, President Thomas Jefferson sent Lewis to Philadelphia to be schooled by America's foremost botanist, Benjamin Barton, much as the Apollo astronauts were trained in geology before their lunar missions.

The expedition succeeded fabulously, recording the wonders of a natural world largely unknown to Western science, and, depending on who's counting, documenting up to 185 new species of plants and animals. Several, including the wildflowers Clarkia and Lewisia, as well as Clark's nutcracker and Lewis's woodpecker, were named in their honor. Any naturalist who has followed the route of Lewis and Clark, or lived in parts of the country they traversed, cannot help but imagine the world around them as Lewis and Clark first saw it.

The Lewis and Clark expedition has been described from seemingly every conceivable angle and its natural-history records are readily available, so what new perspectives could David Dalton, a professor of biology at Reed College in Portland, Oregon, have to offer? Quite a few, as it turns out. Dalton takes the reader on a different kind of journey by using Lewis and Clark's natural-history observations to explore in layman's terms a dazzling assortment of topics in current biology, ranging from genetic engineering and plant physiology to community ecology, ecosystem management, and global climate change. Recounting discoveries made 200 years ago, Dalton creatively forges the links between Lewis and Clark's explorations and the equally far-ranging discoveries of modern-day biologists.

Each chapter features distinctive landscapes, biological communities, or species encountered by Lewis and Clark, typically grounded in accounts quoted from their journals and accompanied by sharp color photographs, relevant historical images, and illustrations of original specimens and drawings from the expedition. With the stage set in this way, Dalton takes up such topics as why the forests of the coastal Pacific Northwest, where the expedition spent an incredibly soggy winter, are dominated by conifers, and what limits how high they can grow. Closer to the ground, in a chapter on "flagship species," Dalton describes the special type of photosynthesis that enables the many lovely members of the wildflower genus Lewisia to thrive in harsh, dry habitats, including the iconic bitterroot (Lewisia rediviva), a valuable food source with easily dried, high-calorie roots, whose species name means "restored to life."

He uses another genus of wildflower discovered by Lewis, mariposa lilies, and a monkey flower species named for Lewis, to discuss speciation, a topic at the forefront of evolutionary biology and an active area for Duke researchers also studying monkey flowers. In the next chapter, Dalton delves into the digestive physiology of balsamroot and camas, two edible wildflowers, explaining why overindulgence in them left members of the Corps of Discovery, as Clark wrote, "nearly all Complaining of their bowels." A subsequent chapter explores the mating rituals of the greater sage grouse, another species discovered by the expedition, and their near total dependence on sagebrush, itself an iconic Western plant with a fascinating chemistry.

Although each chapter has its own distinctive mix of science and history, a recurring theme is ecological change. Dalton's opening chapter examines the likely human-caused extinction of the ancient megafauna that roamed western North America, depriving the Osage orange tree of animals capable of dispersing its massive fruits. (Lewis found this species growing near St. Louis, and cuttings he sent back to Philadelphia are now gnarled trees.) In his final chapter, Dalton, with due regard for its scientific uncertainty, looks at the effect of climate change in the coming decades on the landscapes of the Northwestern U.S. In doing so, he refers to ongoing research in Duke Forest measuring the effect on tree growth of elevated carbon dioxide levels.

In the intervening chapters, Dalton often touches on the changes initiated by the expedition itself, leading as it did to the "taming" of the West. Large swaths of the prairie grasslands have been replaced by introduced invasive weeds, cattle have taken the place of bison herds, and the wolves and grizzly bears that the expedition members memorably encountered have been nearly exterminated. The seemingly endless runs of salmon on which the explorers feasted on the Columbia River now find their way blocked by dams. Dalton provides the science behind all these shifts in the natural world from Lewis and Clark's time to our own, employing a puckish humor in describing, for example, the perilous downstream journey of a juvenile salmon.

Yet even with so much change, much remains the same; hikers still encounter the species Lewis and Clark discovered, and remnant patches of still-wild land persist. Anyone with a fondness for the special places Lewis and Clark first explored will find Dalton's book a welcome and enlightening companion.

 
Grande Expectations: A Year in the Life of Starbucks' Stock
By Karen Blumenthal '81

Grande Expectations: A Year in the Life of Starbucks' Stock
By Karen Blumenthal '81. Crown Business, 2007.
309 pages. $24.95.

Buy, sell, or hold? This is the question that the investors in Karen Blumenthal's Grande Expectations: A Year in the Life of Starbucks' Stock ask themselves as they consider published accounts of the gourmet coffee company's historical performance and stock-analyst expectations-as well as their own gut feelings, and sometimes their caffeinated emotions-in an attempt to predict the future price of the legendary stock and determine the answer for their own portfolios.

Intrigued by apparent inconsistencies in stock valuations-for example, stock prices' ability to move up in the face of seemingly bad news or down in the face of good-despite having spent years as a business reporter for the Wall Street Journal, Blumenthal sets out to find out exactly what makes the stock market tick. She has a hunch that others, attempting to make their own decisions about IRAs, 401(k)s, and their larger financial futures, might be similarly curious about the fluctuating numbers rolling across television screens.

She decides to follow one stock for a year to gain a better understanding of what drives movements in market price. Her stock of choice: Starbucks (SBUX).

Starbucks in 2005 is a growth stock trying to delay the transition to being a value stock after thirteen years of high returns. An investor who bought Starbucks' stock shortly after its venture-capital-backed IPO in 1992 and held it through the end of 2004 stood to make a cumulative return of 4,000 percent. The high returns are seductive, but some experts are arguing that investors have bid the price of Starbucks' stock too high and that it is due for a correction. In that case, an investor would want to sell his shares sooner rather than later.

Blumenthal provides a month-by-month account of the information Starbucks releases to investors over the course of the year, and of how the price of the stock reacts to this information. She writes with a journalist's eye, weaving information about company events and news releases with information she gleans from interviews with various investors, equity analysts, and traders, as well as Starbucks' management.

The most valuable aspects of the book are Blumenthal's interviews with investors. She describes their interactions with Starbucks' management and how they ultimately make decisions regarding their stock holdings. Her interviews highlight the differences in both sophistication and access to information between small individual investors and large institutional investors.

For example, individual investors wait on hold to speak to an investor-relations representative over the phone, while the larger investors can phone top management directly. Individual investors are invited to an annual meeting in Seattle that features celebrity appearances, live music, and samples of the latest coffee and food offerings, but most leave before the "business" portion of the meeting, where votes are taken and serious questions posed. Large shareholders-administrators of mutual funds and financial institutions-skip the meeting altogether in favor of a smaller, more personal information session.

Blumenthal describes how larger investors can transact shares based on their information and analysis more quickly and cheaply through their relationship with traders than could small investors. While ultimately every investor Blumenthal interviews, large or small, makes a bet when deciding whether to buy, sell, or hold Starbucks' stock, Blumenthal depicts a large difference in the information available to these investors and in their ability to act on this information. The smaller investors are at a distinct disadvantage.

The book does provide some insights into short-term movements in Starbucks' stock price over the course of the year. She shows how company officials attempt to control these movements by managing investor and equity-analyst expectations-for example, by providing deflated "same-store sales" growth predictions (numbers that tabulate the company's growth, excluding stores built in the last year) so that the true numbers stand out. But she also shows how analysts are not fooled. What might be an impressive growth in same-store sales of 7 percent, for example, can be disappointing when the experts are calling for 8 percent. She also explains why Starbucks' management may have chosen to undertake a stock split when its share price had fallen from its previous high of $64 per share in the prior year to $50 per share, rather than at the high point-in order to signal its confidence to investors about its future performance.

Blumenthal ends on a cautiously optimistic note. While 2005 was a rocky year relative to prior years for the stock, with the price declining at the start of the year and bouncing around in the middle, it ends the year just below where it started and begins to climb in January of 2006. Blumenthal hints that perhaps Starbucks' management's many attempts throughout the year to stave off stock-price declines and its claims that high growth can continue may have actually been right.

But hindsight in 2008 allows us to see that 2005 was the beginning of the end for Starbucks' stock's high-growth performance.

The secret to stock selection and trading for individual investors, Blumenthal's target audience, may in the end jibe with the long-standing but boring advice of many finance professors and investment professionals. Historically, most investors have not been able to beat the broader stock market in their stock selection and trading activity. The advice follows: Hold long-term positions, broadly diversify within public equities given your allocation to that asset class, and hope for long-term economic growth.