In December of 1962, James W. Stuckert joined W.L. Lyons Company and became a partner of the then-merged J.J.B. Hilliard, W.L. Lyons Company in December 1968. He has served on the board of directors of Hilliard Lyons, Inc. since its incorporation in 1972. Stuckert was responsible for equity trading at Hilliard Lyons prior to his ascension as chairman and CEO of Hilliard Lyons, Inc. in 1995. He is a graduate of the University of Kentucky, receiving a Bachelor of Science Degree in Mechanical Engineering in 1960 and a Master's Degree in Business Administration in 1961. He received the distinguished service award for exceptional service to the University of Kentucky Alumni Association from his his alma mater in 1980. Stuckert was elected into the Alumni Hall of Fame at the University of Kentucky Carol Martin Gatton College of Business and Economics in February 1997. His wife, the former Diane Vittitow of Owensboro, and their three children, Steve, Susie and Scott, are all graduates of the University of Kentucky.

It's 1999 and the Y2K problem -- perceived or real -- is upon us. Should investors in the stock market be concerned?

I don't think they should be concerned. The Securities Industry Association has and is running extensive tests. Stock brokerage firms have been assessed significant dollars to test our systems. I do think the firms in this business have taken the necessary steps to eliminate any Y2K problems.

What specific efforts has Hilliard Lyons made to ensure its operations will not be negatively impacted by Y2K?

Two and a half years ago our firm went to a service provider. Hilliard Lyons took a look at the Y2K problem about three to four years ago. Rather than spend upwards of $10 million to have our systems upgraded, we eliminated that cost entirely by using a service bureau and every system we have is Y2K compliant.

What recommendations would you make to business managers regarding Y2K?

I certainly wouldn't profess to be a computer expert or consultant in any way, shape or form. I would suggest to your readers that when something is very widely anticipated, it never occurs. For this reason, I am thrilled to have the Y2K so widely anticipated. I think Y2K will probably go out with a whimper. Let me digress for just a minute. Hilliard Lyons is also having its facilities Y2K verified. For example, if an electric utility fails, Hilliard Lyons has its own generators that would start up automatically. The pump for the generator's fuel system isn't electric. You want the fuel to gravity flow. There are all kinds of checks if you want to be ultra, ultra conservative. Top managers are aware of these concerns, and I just can't believe they will walk blindly into Y2K.

What are your forecasts for the U.S. and Kentucky economy in 1999?

The United States economy will continue to do well. Growth has been far better than predicted during the last number of years. 1999 probably will not be much different. The 1999 growth rate might be a little slower than 1998's. Frankly, I think some of the government economic estimates are a little suspect. For example, government data indicate that there are no savings at all. I don't believe that.

The Kentucky economy will be a microcosm of the U.S. economy. Kentucky's economy will continue to grow, perhaps not as much as in the recent past. We've had extraordinary growth during the last three to four years. I feel that in 1999, growth will continue at a slightly reduced rate, but nevertheless continue. I look for the world economy in the year 2000 and beyond to do fairly well, particularly in the U.S.

With a strong U.S. economy and low inflation, do you feel the Dow-Jones industrial average will achieve the 10,000 mark any time soon?

It probably will. The stock market historically has strong years going into the third year of a four-year presidential term. While on a historical basis the third year is by far the best, I don't think that will prove to be the case in 1999. I just can't envision the Dow being up 15 or 20 percent or more this year after three consecutive years of being way above trend-line growth.

Internet stocks are rapidly increasing in value. What recommendation would you make to investors?

Well, I don't think there are very many "investors" in the Internet stocks. Internet stock, as a group, has a tremendous growth curve ahead of it. The stock, however, has been discounted to the "hereafter". For Internet stocks to have the valuations that they now have -- some of them now sell for more than Boeing, Wal-Mart and other major American corporations -- is a mania.

With the vast amount of research available on the web, many investors are bypassing conventional stock brokers -- such as Hilliard Lyons -- and placing e-mail orders with web site stock brokers at a substantial cost savings. How does this phenomenon affect your industry and what is Hilliard Lyons doing to remain competitive?

Hilliard Lyons has always been concerned with the client and seeing to it that the client develops a long-term program and at the end of the day has a sound basis for believing he'll have dollars for retirement, the college education for his children or grandchildren, that second home or whatever else might be in his line of fire. There are too many people busy in their own vocations that don't have the skill set or the interest to pursue the market over a long-term basis. And that is where Hilliard Lyons has always focused its efforts. Our market is not buying and selling stocks on the web and trading on a daily basis. People have had a lot of success in the stockmarket over the last three to four years. I think once you see a bear market, with the market down for a year or so, there will be a change of opinion as to exactly how easy it is to make money in the stockmarket.

Hilliard Lyons is Kentucky's largest stockbroker, with more than 20 offices located in the Commonwealth. Twenty-three percent of all securities in Kentucky are traded by Hilliard Lyons. Why has your firm been such a dominant force in the Kentucky market?

What Hilliard Lyons does for our 23 percent ranking is just take care of its customers. Our firm is not institutionally focused. Hilliard Lyons will do, in the future, more corporate finance business and stock underwriting perhaps, but its strength has been in the Investment Management Group, which contains a trust company, investment advisory services and retail clients. Our clients have been very satisfied, very happy over a long-term period of time. Our clients relax, take it easy, don't get excited when the stockmarket's up, and don't fall into despair when its down. Take a long-term approach and you'll do very well. W. L. Lyons & Company Partnership started in 1854. The J.J.B. Hilliard & Son Partnership was founded in 1872. The two firms merged as a partnership in 1965, incorporated in 1972 and then were sold to PNC on December 1, 1998.

Please comment briefly on these topics:

Taxation in Kentucky

Kentucky's income tax is not competitive. Tennessee has no state income tax. Indiana has a 3.4 percent state income tax with the federal tax deductible -- an effective rate of about two percent. Two percent in Indiana compared with six percent in Kentucky means Kentuckians are paying an additional four percent for the privilege of living in the Commonwealth. Higher taxes have hurt Kentucky, because it loses major homegrown companies when they merge with other companies. And attracting major corporations to move their headquarters to Kentucky is very, very difficult with the six percent flat rate state income tax.

Kentucky Cabinet for Economic Development

The Economic Development Cabinet does a good job, but Kentucky is fast becoming a huge branch state. Kentucky is just not retaining the home-owned, home-grown companies. It is very difficult for Kentucky to recruit these types of businesses.

Quality of education in Kentucky

The educational system could be improved. I'd like to see educational vouchers of some type. You need competitiveness in education. In our colleges, we've spent a lot of money to educate a lot of youngsters. Unfortunately, when they get out of college there are not a lot of jobs available. I support improving our education, but Kentucky has to complete the circle and create opportunities so our college graduates can remain in Kentucky, become fine citizens and produce additional wealth, so that the next generation coming along will have opportunity.

Leadership of Governor Paul Patton

Paul Patton was a pledge brother of mine at the University of Kentucky and we went through mechanical engineering together, so I've known the gentleman since the '50s. I think Paul's done a wonderful job to try to take Kentucky to the next level. His redo of workmen's compensation and leadership on that position alone has probably stemmed the tide of additional corporations moving out of Kentucky.

Economy of Greater Louisville

The Greater Louisville area is trying to continue to plug along, continue to grow. At least it is focused now and unitized; one economic development agency isn't against another. I think Doug Cobb, CEO of Greater Louisville, Inc. will do, given some time, a very fine job. I'm very pleased that he's heading up the Chamber and certainly giving great direction to all of the entities that interface with the Chamber. Doug is a very bright, articulate and focused individual and if anybody can make Greater Louisville do quite well, he will.

Hilliard Lyons recently merged with PNC Bankcorp. What are the benefits of this relationship?

In this business, as in any other business, you've got to not only achieve critical mass, but you also have to sustain it in a much more competitive environment. For example -- to develop a line of code in a software program that our retail financial consultants need to service our customers costs $50,000. If you've got 500 financial consultants, it is $100 a piece; and if you've got 50, it's $1000 a piece; and if you've got 5000, then it's $10 a piece. These new service offerings give value to our clients. Hilliard Lyons has got to be able to immediately have different types of information at its forefront and to compete in this environment. Costs are not going down; in fact they are going up. What PNC brings to Hilliard Lyons is the ability to expand faster and to achieve our targeted critical mass sooner. Over the last three years, as financial consultants, Hilliard Lyons is up over 50 percent. Our gross revenues have probably doubled over the last four years.

Post merger, in what areas will Hilliard Lyons be focusing for new growth?

Hilliard Lyons has tremendous opportunities to grow through the PNC footprint, which is primarily in Pennsylvania. Hilliard Lyons only has four offices in Ohio and I'd like to see us with 15 to 25, given a little bit of time. In Pennsylvania, there is no reason for Hilliard Lyons not to have 30, 40, 50 over a five- to ten-year period. The name will remain Hilliard Lyons, Inc. When I speak of offices, they will be free standing, and not in a bank.

How does Hilliard Lyons identify and recruit stockbrokers and managers to work in and develop new markets?

In the PNC markets, PNC has brokerage operations. The PNC brokerage operation currently has approximately 260 to 270 financial consultants. Hilliard Lyons will probably hire 60 to 80 of PNC's experienced brokers to staff its new operations. The remaining bank-based brokers will continue to work for PNC. All clearing operations in Pittsburgh are moving to Louisville. Hilliard Lyons will clear for the PNC and our stockbrokers in the expansion/merged areas.

In your opinion, what are the three top factors that make a new stockbroker successful?

Attitude, energy and knowledge

Where is the future going to take us?

I wish I were 30 years younger so I could experience what is going to happen over the next 30 to 40 years in the business world. There will be more changes over the next 10, 20 or 30 years in the business world than we've seen in the last 50 to 100. There will be tremendous leaps in terms of productivity in a lot of arenas. We are just beginning to see some of the ramifications of the power of a computer and a chip and the future is truly just going to be amazing. Everybody is going to have to learn fundamentals and become familiar with computers. The future bodes extremely well. The United States, with its freedom for people, will lead this world for many, many, decades to come.