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Marin Independent Journal
Teen offers new brand of optimism
Wednesday, August 04, 2004 - Like many young entrepreneurs, 19-year-old Toby Scammell of Larkspur sought some advice before he launched his Web site TerrorPlaybook.com last week. Instead of business consultants or industry analysts, he called the San Rafael office of the Federal Bureau of Investigation.
"I wanted to make sure that it wasn't misinterpreted," Scammell said of his site, designed to help both individual and institutional investors "prepare for and respond to the financial impacts" of terrorist attacks.
Once he got the green light from FBI Agent Doug Perez, Scammell - a sophomore majoring in international relations and global business at the University of Southern California - began offering subscriptions to investors, detailing the companies that would benefit from, and be financially hurt by, specific types of terrorist attacks.
For instance, a sample report on the site highlights the potential windfall an anthrax attack might have on a company such as Aethlon Medical Inc., which is making a wearable device that would filter dangerous bio-terror agents out of the blood stream.
By educating investors on how to profit from a terrorist attack, Scammell, a 2003 Redwood High graduate whose family moved to Larkspur when he was 6, knows he might not be winning popularity contests.
"But we're living in a new era, where terrorism is just another scenario that you have to have to account for," he said, noting that the Nasdaq dropped more than 16 percent and the Dow Jones Industrial Average more than 14 percent in the week after the Sept. 11, 2001 terrorist attacks. "To ignore it is doing yourself a disservice."
Although hundreds of terrorism discussion groups have launched online since Sept. 11 and a number of academic institutions produce terrorism-related reports, Scammell said his is a unique service.
Subscribers can pay $100 for six months of access to the reports or $180 for a full year.
In the event of an actual attack, Scammell said he will produce real-time information specific to that event for subscribers. He said he has signed up 37 subscribers in one week.
"I don't think there is any other service that's available to the public like ours," he said. "Our whole goal is to allow people to prepare for and react to the next terrorist attack."
Scammell is not the first to venture into the world of terrorism-related financial markets.
In July 2003, the Pentagon scrapped the fledgling Policy Analysis Market, a terrorism futures market designed to help predict terrorist strikes, with federal lawmakers calling the plan "ridiculous" and "grotesque."
The plan, developed by the Pentagon's Defense Advanced Research Projects Agency, would have speculated on future events - like the assassination of Palestinian leader Yasser Arafat or a terrorist attack at the Olympic Games in Athens - as if they were stocks.
Once the Pentagon shelved the terrorism futures market, entrepreneur Chad Noble decided to develop a similar model, TerrorBet, which is still in the early stages of development. Noble said he wished Scammell well, and said he will likely have to get his service up and running for a while before it becomes an accepted business.
"The whole idea will not appeal to the public until it is running as they will then be able to see over the 'make money on terrorism' thought and come to see the true value of an independent measure," he said.
Noble said his TerrorBet Index would have been useful this week when Homeland Security chief Tom Ridge announced that specific financial buildings on the East Coast had been scouted by al-Qaida terrorists.
"If the president suddenly states that the 'nation is facing imminent attack' but the TerrorBet Index is down, people" would have reason to question "the warning," he said. "And if the if the index is rising sharply, it would support the president's warning."
To Scammell, offering investors terrorism reports is only the beginning. He's already started a contest on the Web site called "I, Terrorist," asking people to think like an intelligence agent and identify specific areas and places of vulnerability to a potential terrorist attack. The person who comes up with the best idea, chosen by Scammell, will get a $500 cash prize.
"The CIA and FBI can't see everything that the average American sees in terms of security vulnerabilities," he said. "It should be interesting to see what people come up with."
Contact Jim Welte via e-mail at jwelte@marinij.com
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