Harry Rady Online – San Diego, CA

05/01/2011
Louis Rukeyser’s Wall Street
Rady, Harry

Comments & Outlook
The economy is healing, but the market hasn’t acknowledged the pleth¬ora of risks related to uncertainty in the Middle east, Japan or even the US budget deficit. The Federal reserve’s second round of quantitative easing will likely end soon, but investors are playing the momentum game, hoping to buy high and sell higher. That’s a myopic and dangerous strategy. It’s time to be cautious.

Recommended Strategies
If investors believe it’s time to be cautious and protect their portfolio, there’s nothing better than the VIX [S&P 500 Volatility Index]. During last year’s Flash Crash and the european sovereign debt crisis, the broad market declined by 14 percent from March to May, while the VIX gained 181 per¬cent. There are many ways to play the VIX, but we focus on two exchange-traded notes, iPath S&P 500 Short
Term Futures ETN (NYSe:VXX) and VelocityShares Daily 2X VIX Short Term ETN (NYSe: TVIX).

As contrarian investors, we like drug and biotech stocks. Many of these stocks trade at single-digit price¬to-earnings ratios because of uncer¬tainty surrounding President Obama’s health care reform. Their balance sheets are clean and people will take their medication no matter what hap¬pens in the economy.

What to Buy Now
Research In Motion (NSDQ: rIMM) shares trades at 8 times earnings and 70 percent of the firm’s revenue is garnered overseas. Overseas revenue has grown by 70 percent. Investors have focused on the firm’s domestic sales, which have slumped 12 to 15 percent. The company’s Blackberry line of com-munication devices is getting its lunch eaten by Apple’s (NSDQ: APPL) iPhone on the high end.

But the real opportunity for research in Motion is in the emerging markets and the low end. We see at least 50 per¬cent upside to the stock, and it could be an acquisition target.

Flir Systems (NSDQ: FLIr) has a virtual monopoly on the thermal and infrared imaging technologies used by the US military. Although defense bud-get cuts loom, the US military won’t cut back on its ability to see at night, espe¬cially because Flir’s products aren’t very expensive.

The vast majority of the firm’s sales come from the US defense industry. But the real opportunity for Flir is in the commercial and residential security space. Two years ago, Flir’s cheapest products sold for about $25,000 to $30,000. Those same products today cost about $1,500 to $3,000. The com¬mercial and residential market could be 10 times the size of their defense busi-ness—that’s a strong secular tailwind. Flir is also a likely takeover target for one of the large defense companies.

Original Article – http://us.vocuspr.com/ViewAttachment.aspx?EID=jvsz0F%2fGPcZfUMS8rGkojcUs1eeK9ocYFu6%2bjRKL6Fs%3d

Originally Published on TheStreet.com
by Debra Borchardt
April 5, 2011

NEW YORK (TheStreet) — Harry Rady of Rady Asset Management thinks the hot start for deal activity in 2011 may be just the beginning.

“We’ve seen a massive amount of M&A coming this year and what we’ve seen so far is just the tip of the iceberg,” says Rady, whose San Diego-based firm has more than $250 million in assets under management.

Rady should know. He says his firm typically sees 5-10 of the companies in its portfolio get acquired each year. In his opinion, most deals take between six and 18 months of discussions and negotiations before they are announced. Rady believes the pipeline is full and that the market will explode with deals.

Rady believes that the economy is growing very slowly and companies are sitting on huge troves of cash. These companies have made all the cuts they can make and won’t see any growth organically. In order to achieve growth, they need to buy it. Credit markets have been supporting transactions as well.

A recent example for Rady is Cephalon(CEPH). He owned the biotech company in his portfolio and was rewarded when it received a $5.7 billion buyout offer from Valient International(VRX) last week. The stock jumped even beyond the offering price as market watchers decided the hostile bid might go even higher.

Rady thought that Cephalon’s value was depressed because the market was too focused on the short term and not giving the company enough credit for existing products and its pipeline. This is generally his strategy. Find good companies that the market has ignored. Here are some additional stocks that Rady thinks are takeover targets.

Adobe Systems(ADBE) has underperformed compared to its peers in 2010. Mostly because Apple(AAPL) refused to adopt Adobe’s Flash in its mobile platforms — specifically the iPad. Another negative came in September when Adobe said its sales were slowing.

Rady thinks the market has overreacted to these events. He believes in Adobe’s intellectual property and its dominant market share in web development and graphics software.

“Its market cap and IP portfolio also make it an attractive acquisition candidate. At 14x, we think the stock has approximately 50% upside to a price target of $45,” says Rady.

The gaming sector has been hurt by declining software and hardware sales. Activision Blizzard(ATVI) just killed its Guitar Hero franchise and won’t have a new World of Warcraft release until 2012.

But the company does have 12 million online subscribers driving profits. Activison expects the market for online-enabled game consoles like the Xbox and PS3 will grow by 24% and is focusing on this business as opposed to developing games for smart phones.

Rady thinks ATVI is an attractive takeover candidate that will outperform. He says, “Dominant, best of breed company with a 12-18 month price target of $18, approximately 50%.”

FLIR Systems(FLIR) designs and manufactures thermal imaging systems used by the military. Rady sees FLIR as an attractive stock that has flown under the radar for awhile.

Market watchers have been concerned about military spending cuts and the impact they could have on the company but the latest Republican budget proposal calls for an increase in military spending.

FLIR has been expanding the use of its products in commercial and retail markets as well. Rady believes that a bigger defense company worried about cuts in government spending may look at FLIR as a way to jumpstart growth. He has a price target that is 50% higher than where the stock currently trades, which is near $35.00.

Iridium(IRDM) provides mobile voice and data through satellites. The company has dropped as a result of fewer equipment sales. But Rady points out that the company upgrades its satellites and maintains 15% plus in overall growth.

TheStreet Ratings has a hold on the stock and notes that net income growth has not outpaced the company’s average competitor even though sales have.

Rady believes the market will reward this niche player, whose stock is down more than 3% in the past year, and has a price target of $15.00

NuVasive(NUVA) is a medical device company that concentrates on products for the surgical treatment of spine disorders. The stock has struggled because of uncertainty over insurance reimbursements.

But NuVasive is a pioneer in its field and demand continues to grow as baby boomers age. Mizuho Securities upgraded the stock to outperform in March and set a 12-month price target of $29.

Rady points out that, prior to the worries over reimbursement, the stock was 100% higher and he sees no reason why it can’t return to those levels.

Savient(SVNT) has fresh approval from the FDA for its gout/arthritis treatment Krystexxa, but the market smacked it down 50%. The reason? Savient put itself up for sale and no one stepped up to buy.

On the bright side, there is a large market for the drug and little competition, so Savient can still grow organically.

Rady believes a buyer may yet appear and says there is potential for the stock to rise 100% for where it is now, which is roughly $10.50.

SandRidge (SD) is an oil and natural gas exploration company with activities in Permian Basin, Texas and the Gulf of Mexico. It was a $60 stock in 2008 and closed Monday at $12.97.

Shorten up the time horizon though and the performance looks a lot better as SandRidge shares are up more than 70% in the past year, and have more than doubled from a 52-week low of $3.97 last August.

Many investors have been banking on natural gas prices to rise and they haven’t. Rady says the company has been transformed from a pure gas play to a company with more balance following a recent oil deal. He has a $14.00 target price

Original Article: http://www.thestreet.com/story/11071142/1/a-fund-managers-top-takeover-stocks.html?cm_ven=RSSFeed

U.S. Stocks End Mixed, But Leaders Shine | Web
11/22/2010
Originally Published on Investors.com
By Mao, Vincent

Euro-zone fears and worries over the financial sector pressured stocks, but they fought back to a mixed finish Monday.

The Nasdaq rose 0.6% after having been down as much as 0.7%. It found support near the 2500 level. The NYSE composite fell 0.4%, while the Dow and S&P 500 lost 0.2% each. All three were down between 1.3% and 1.5% at session lows. Volume fell on both exchanges.

A number of leaders had a nice day. About 78 stocks in the IBD 100 ended higher.

F5 Networks (FFIV) rallied nearly 8% to an all-time high in heavy trading. The stock cleared a 128.05 buy point in a three-weeks-tight pattern. F5 provides optimization technologies for network applications. It grew earnings between 30% and 65% over the past four quarters. Sales growth ranged from 15% to 46% over the same period.

Riverbed Technology (RVBD) erased opening losses, climbing 6% to a record high. The stock found support at its 10-week moving average in October. Riverbed provides products and services that improve applications and accessibility over wide-area networks. Its earnings grew between 10% and 86% in the past four quarters. Sales grew 22% to 45% over the same period.

VanceInfo Technologies (VIT) rallied 6% as it continued to rebound from a second test of its 50-day moving average. It’s now just about 1% off its Nov. 4 record high. The stock cleared a cup-with-handle base in July. Last week, the Chinese provider of software research and development services beat views with a 24% rise in Q3 earnings. After the close, the company announced a secondary offering of 2.2 million American depositary shares.

Group mate HiSoft Technology International (HSFT) gapped up and added 4% in heavy trading. It too is rebounding from a test of its 50-day line. Before the open, the Chinese IT services provider delivered Q3 earnings of 21 cents a share, up 163% and 3 cents above views. Sales grew 53% to $38.9 million, also above views. The company also guided full-year profit at 82 cents or 83 cents a share vs. views of 77 cents.

Outside of technology, Chipotle Mexican Grill (CMG) climbed 5% to an all-time high. That puts shares 57% past a buy point from a cup-with-handle base cleared Sept. 1.

On the downside, financials were some of the session’s worst performers. The Financial Select Sector SPDR dropped 1.4%. Big banks such as Goldman Sachs (GS) fell 3% and Morgan Stanley (MS) lost 2%. Both are laggards with Relative Price Strength Ratings of 49 and 14, respectively. “Several factors weighed negatively on financial stocks today,” noted Harry Rady, CEO and portfolio manager at Rady Asset Management.

First, Barclays Research reported that the top U.S. banks may have a shortfall of $100 billion to $150 billion in capital as per Basel III standards. Second, the effort to bail out Ireland continues to put pressure on Financials. And last, the FBI conducted raids on a few hedge funds related to a new alleged insider-trading probe.

Elsewhere, Hewlett-Packard (HPQ) reported October fiscal Q4 earnings after the closing bell. The company earned $1.33 a share, up 17% and 6 cents over views. Sales grew 8%, also beating views. HP also guided fiscal Q1 profit and sales above analysts’ estimates. Shares rose 1% in extended trading.

The second estimate of the Q3 GDP, existing home sales and the minutes from the Nov. 3 Fed minutes will be out Tuesday.

As originally posted on Bloombert.com
By Nikolaj Gammeltoft

OpenTable Inc. short sellers are placing record wagers against the online restaurant-reservation company, betting it will slump after posting bigger gains than every other U.S. initial public offering in the past two years.

The San Francisco-based company’s shares jumped 230 percent through yesterday since the IPO almost 18 months ago. The rally convinced investors to sell short 15 percent of its shares outstanding, the most since OpenTable began trading in May 2009 and more than twice its average level, according to data compiled by Data Explorers, a New York-based research firm.

Rady Asset Management LLC and T2 Partners LLC are betting OpenTable’s prospects don’t justify a price-earnings ratio of 122, or eight times higher than the valuation for the Standard & Poor’s 500 Index. While analysts estimate the company will post 51 percent growth in per-share profit in 2011, OpenTable may run out of room to expand its business, said T2’s Whitney Tilson, who lost money when the shares jumped 11 percent on Nov. 3 following the company’s quarterly earnings report.

“It’s one of the most overvalued stocks we’ve ever seen,” said Whitney Tilson, who oversees $214 million with Glenn Tongue at T2 in New York. “It’s a well-run company, but it’s stretching for growth and the earnings report was misinterpreted as a spectacular report, when it was only OK.”

Tiffany Fox, a spokeswoman for OpenTable, declined to comment.

Fourfold Profit Gain

OpenTable, which posted a fourfold increase in third- quarter income last week, makes money from restaurants that install its system and collects monthly subscriptions and a fee for each guest seated through online bookings. Diners schedule reservations for free through OpenTable’s website or applications on devices such as Apple Inc.’s iPhone.

The stock, which has at least five analyst “buy” ratings and seven “holds,” peaked at $69.61 on Nov. 4 after the third- quarter earnings announcement. It closed at $65.95 yesterday, and fell 0.1 percent to $65.87 at 11:49 a.m. in New York.

OpenTable has one of the best management teams among small Internet companies with strong growth opportunities, according to Citigroup Inc. analyst Mark Mahaney, who increased his share- price estimate to $80 this month. The stock has risen 16 percent since he boosted his rating to “buy” from “hold” on Sept. 13.

“What OpenTable has proven is that it has created a dominant transactions platform on which in can layer in new, high-margin revenue streams,” the San Francisco-based analyst wrote in a note to investors last week. “Impressive.”

Adding to Bet

Tilson said his firm started betting against OpenTable several weeks ago and added to the wager after the quarterly report drove the shares higher. Short selling is the sale of borrowed stock in the hope of profiting by buying the securities later at a lower price and returning them to the shareholder.

OpenTable reported third-quarter earnings excluding some items of 23 cents a share, beating the average analyst estimate by 54 percent, Bloomberg data show. The number of restaurants using its software rose to 15,246 as of Sept. 30, up 31 percent from a year earlier. The company is expanding its web-based Connect service, a lower-cost alternative for restaurants that take fewer reservations.

“They are cutting their prices to customers in order to maintain the growth in restaurants that investors want to see,” said Tilson, whose Tilson Focus Fund has outperformed 93 percent of peers in the past five years, according to data compiled by Bloomberg. “You can cut prices to help growth, but that will eventually hurt your profit.”

Short Interest

The proportion of OpenTable shares that were sold short climbed to 15 percent on Nov. 3, according to Data Explorers. That compares with a low of 1.5 percent in December.

Short-selling in OpenTable is increasing as shares of S&P 500 companies borrowed and sold short fell 2.1 percent to 7.76 billion between Oct. 15 and Oct. 29, the lowest level since June 30, according to exchange data compiled by Bloomberg. Short interest for the benchmark gauge for U.S. equities slumped to 4.4 percent of shares available for trading, also known as “float.” It’s down from 4.6 percent in September.

OpenTable’s 230 percent rally since it sold shares in May 2009 is the most among companies that conducted initial public offerings since Jan. 1, 2009, according to data compiled by Bloomberg.

50 Percent Lower

“We would argue that the stock price could be 50 percent lower,” said Harry Rady, chief executive officer of Rady Asset Management in La Jolla, California, which runs a long-short fund that is betting against OpenTable. “The stock is ahead of itself and is priced for perfection.”

OpenTable has created a service called Spotlight that offers coupons to restaurants. It competes with Groupon Inc., the owner of a coupon website with 20 million subscribers that’s seeking venture funding in a deal that may value the company at about $3 billion, according to people familiar with the matter. OpenTable has a stock-market value of $1.52 billion.

“OpenTable is a pure valuation trade for us,” said Rady, who manages $270 million. “The stock is too expensive, even using the most optimistic assumptions, which therefore makes it vulnerable.”

Source: http://www.bloomberg.com/news/2010-11-11/opentable-s-230-surge-lures-short-sales-after-best-u-s-ipo.html

Originally published on InvestmentNews.com
by Jeff Benjamin
11/2/10

Legalizing joints could lead to fewer inmates in the joint, says Rady; jail operator’s share price at 52-week high

Today’s vote on legalizing marijuana use in California has triggered the aggressive short sale of the operator of a private correctional facility where up to 30% of the prisoners are incarcerated on marijuana-related crimes.

By shorting Corrections Corporation of America (

The stock, at more than $26 per share, is trading at a 52-week high and has gained 44% since falling to around $19 in March.

Technical analysis also shows resistance to a bearish turn for the stock.

Last month, the stock’s 50-day moving-average price crossed above its 200-day moving average in a “golden cross” move that is considered to be a bullish indicator.

Mr. Rady, who manages $270 million as chief executive of Rady Asset Management LLC, is betting on the passage of Proposition 19, which would legalize marijuana cultivation and possession for personal use, and allow for taxation by local governments.

The impact of legalized marijuana on a company such as CCA could be immediate, he said.

“The prisons are so overcrowded that it would be a very compelling reason to let those prisoners out of jail for marijuana-related crimes,” Mr. Rady said. “If I’m wrong, the stock is already trading at its 52-week high and probably doesn’t go up on the news, but if I’m right, look out below.”

Polls leading up to today’s vote had opposition to legalized pot in California outweighing support, 51% to 39%.

But Mr. Rady’s case for shorting the stock is also bolstered by a hunch that the company’s earnings report Wednesday could come in below analysts’ estimates of 37 cents per share, which is up from 33 cents a year ago.

- Source: http://www.investmentnews.com/article/20101102/FREE/101109986

As originally published on AdvisorOne.com

One of the biggest frustrations I’ve had over the past few years is hedge fund managers “gating” their investors. High-net-worth (HNW) investors commit substantial personal capital to these hedge funds with the expectation that the manager will limit the downside and generate greater returns than your typical index-chasing portfolio.

Unfortunately, during the downturn, not only did they suffer losses, but they went so far as to lock-up the investors’ assets within the funds. Investors were unable to access their money for an indefinite period of time regardless of circumstances.

To me this is inexcusable; while I understand investments in private equity and other illiquid strategies have longer-term commitments, it is unconscionable to think a long-short domestic manager should and/or would tie up their investors’ assets. For this reason, I encourage investors to avoid limited partnerships with gating provisions in place.

Some good has actually come out of the publicity on gating. The industry has seen the expansion of publicly-traded alternative (hedge fund) mutual funds. As a portfolio manager of an alternative mutual fund, I am far from impartial, but recently a number of well-respected hedge fund managers have decided to offer their strategies in this liquid, transparent format with daily pricing.

I would encourage all HNW investors to consider adding exposure to alternatives—but first look at the alternatives offered in a mutual fund format. Typically, adding a hedged strategy would decrease a portfolio’s overall correlation to the markets and would therefore lower the portfolio’s risk profile and corresponding volatility.

I would strongly encourage investors to focus on risk-adjusted returns. A tactically-managed hedged strategy may offer the added benefit of providing an asymmetric risk/reward profile. If the hedged strategy is available in a mutual fund format then the risk-adjusted return profile gets even more attractive given the importance of liquidity in calculating risk-adjusted returns.

As originally published on TheStreet.com
by Andrea Tse
10/25/2010

NEW YORK (TheStreet) — A number of widely-discussed stocks are poised to plummet — some by more than 20% and others by more than 50%, according to a number of investment managers we polled. From stocks that have serious fundamental issues to those that could drop on valuation, read on for three stocks that some market watchers think could tank within a year …

Barnes & Noble
Predicted Percentage Drop: Roughly 25%
Time Period: Next three to six months
Number of Analysts: 6
Average Recommendation: Hold
Market Cap: $899.2 million
Trailing Twelve-Month Operating Margin: 2.7%
Trailing Twelve-Month Revenue: $6.05 billion
Why Barnes & Noble Stock Could Plummet: “There’s a couple of different things,” said Brian Shepardson, co-portfolio manager of the James Market Neutral Fund. “On the big-picture issue, I think they’re facing a lot of competition from Amazon.com(AMZN_) and Wal-Mart(WMT_) … heavily in that area, too, so those are the two big places where we can purchase books, per say — like a hardcopy or paperback version. They’re also coming up against the iPads, the Kindles of the world that are bringing out content in a different format. So that’s kind of the rationale behind it. I don’t know if it’ll be to this extent, but it kind of reminds of — for a while Blockbuster — if you wanted to rent a movie, that was the big place that you would go to. And then came along Netflix( NFLX ) and delivering movies over the Internet — a different format without having to visit that physical store.

“Just looking at what we saw recently, I would say in the short-term, I could see it dropping back to $12, just where it was in July — maybe down to $10.77; that was its low back in 2008. I don’t see why it can’t touch there just in the immediate future (three to six months), then trickle lower than that.”

“Right now their earnings — they’re having a difficult time with their earnings. They’re in a negative position, so they actually have a negative P/E ratio; their return on assets is only around 1%. They’re paying a dividend, but their payout ratio is a 150%; so either they’re going to have to find a way to raise their income or else cut back on that dividend. It’s not just the story behind it; there are also some fundamentals within the company that we’re looking at.”

Salesforce.com
Predicted Percentage Drop: Up to 50%
Time Period: Next 12 months
Number of Analysts: 40
Average Recommendation: Outperform
Stock Price/Earnings Ratio vs. Industry’s: 901.91%
Market Cap: $14.7 billio
Trailing Twelve-Month Operating Margin: 8.1%
Trailing Twelve-Month Revenue: $1.46 billion
Why Salesforce.com Stock Could Plummet:”From a valuation perspective, all the cloud computing stocks are vulnerable,” said Harry Rady, chief investment officer and portfolio manager of Rady Asset Management. “I mean a number of these stocks are a trading at a hundred times earnings, so take your pick — Salesforce.com, VMware(VMW_), the whole space is just crazy.

“I look at them more as a basket. They’re both great companies doing really well, yet Salesforce is trading a 180 times trailing earnings and 90 times forward earnings and VMWare is trading at 105 times trailing earnings and 51 times forward earnings. So I don’t really have anything bad to say about them other than the valuations are ridiculous…”

VMware
Predicted Percentage Drop: Up to 50%
Time Period: Next 12 months
Number of Analysts: 34
Average Recommendation: Hold
Stock Price/Earnings Ratio vs. Industry’s: 413.53%
Market Cap: $32.2 billion
Trailing Twelve-Month Operating Margin: 12.4%
Trailing Twelve-Month Revenue: $2.41 billion
Why VMware Stock Could Plummet: “Fundamentally they are doing very well,” Rady continued. “But what you’ve got to remember is that product cycles are very short in this business and companies can be leapfrogged technologically almost overnight, so they’re only as good as their next product and if they stumble the stock could get cut in half. So expectations are that they just keep executing and keep putting out perfect product after perfect product; and that may happen — but we think it’s already discounted in the price of the stock.”

“VMWare is a great company with 20% long-term growth rates. So really well-run companies with growth rates like that should maybe trade at 20, 25 times earnings. So in our opinion, the stock should be down 50% from here.”

“Salesforce — same idea. It’s growing at about 25%, so perhaps the company should trade at 25, maybe even 30 times earnings, which gets you to a stock down more than 50%.”

Let’s face it, the last few years have been very difficult for investors and portfolio managers alike. One thing that should have become abundantly clear is the inherent conflict of interest between both parties. When times are good and markets are moving up at a steady pace, investors tend to become complacent and ignore potential pitfalls. However, when the markets turn down and the environment gets tough, investors panic and start to ask the questions they should have asked long before making their initial decisions.

I have the unique benefit of being a portfolio manager while also serving as chairman of the Investment Committee for Rady Children’s Hospital in San Diego. At Rady’s, I help identify investment managers that will complement the hospitals endowment portfolio. Throughout the year managers present to our team and inevitably the first question we ask is, “Do you and your team have a significant investment in the strategy you are managing?”  If the answer is, “No” the manager is likely to be eliminated from consideration.

I practice what I preach, because the portfolios I manage were established with my capital and I continue to add to them over time as I believe any managers who are worth their salt should have a substantial capital commitment to their strategies. This alignment of interest is often overlooked and should become one of the first questions all high-net-worth  investors should ask any current or potential money manager.

Having the managers’ capital invested pari-passu with yours may lower the likelihood of the manager taking inappropriate risks when they feel the “pinch” along with their investors when performance is poor.

The other component that is often overlooked is the net after-tax returns of a portfolio. After all, that’s what investors are left holding after paying Uncle Sam, the investment manager and any other associated fees. I’m always thinking about, and focused on, the potential tax consequences of any investment at year-end. I take portfolio risk management very seriously and believe that a good risk manager takes tax implications into account since it can be a significant permanent impairment of invested capital.  These are just a few of the factors that investors—and the advisors guiding their clients—need to pay closer attention to. After all, it’s the client’s money, not the money manager’s.

Ernest Rady, the father of Harry Rady of Rady Asset Management, continues a trend begun in the late 1990s of charitable giving, according to Bob Kelly, president of The San Diego Foundation.

The $60 million donation by Ernest Rady creates a new reality for San Diego County as far charitable support is concerned.  “We have jumped into the big leagues of charitable giving,” said Kelly.

According to Donald Fellows of Marts and Lundy, a New Jersey-headquartered fundraising consulting firm to nonprofits, San Diego is finally showing signs of growing up as far as the city’s philanthropic community is concerned.

“It was sort of like San Diego hadn’t grown up yet from a philanthropic standpoint,” said Fellows. “That has clearly changed.”

San Diego is hopeful that additional donations will be forthcoming on the heels of the generous gift of Ernest Rady to the Children’s Hospital and Health Center of San Diego.  The $60 million gift “…really does set a new benchmark, and it gives everybody in the (nonprofit) community more hope,” said Bob Kelly, president and chief executive of The San Diego Foundation, and organization which raises money for a variety of institutions in the San Diego area.

For many years San Diego County has lagged behind other regions as recipients of philanthropic generosity.  Since the late 1990s San Diego has experienced a large increase in the number of donations exceeding $10 million. At the end of the ‘90s San Diego began to benefit from the stock market boom plus many more wealthy people began moving into the area. In addition, the widow of the founder of McDonald’s, Joan Kroc, made an $80 million donation to the San Diego branch of the Salvation Army, which many believe helped turn the tide for philanthropic giving in San Diego.