DJ up 100 as war opens

The Ticker

January 17, 1991|By Julius Westheimer

In the first hour of trading today the Dow Jones industrial average gained almost 100 points in heavy trading. At 10:30 a.m. the Dow indicator stood at 2606.34, up 97.52 points over yesterday's close. The blue chip index is now down about 300 points since the Mideast crisis began on August 2.

NOW WHERE? "We'll see the Dow Jones and S&P 500-stock average down 20 percent some time this year, but then you could see one of history's best buying opportunities." (Richard Fontaine, CEO, Baltimore-based Fontaine Capital Appreciation Fund) . . . "Shortly after eight postwar crises, the S&P index dropped an average of 16 percent in five weeks, but one year later the average was up 22 percent." (Dick Davis Digest) . . . "The Dow index could suffer a war swoon, but when sentiment improves and falling interest rates work their usual magic, the Dow could trade up to 15 times earnings, or 3,250." (Dessauer's Journal) . . . "Any post-crisis rally could run out of steam quickly. The recession may be a worse problem than the war." (Robert Stovall, investment adviser)

CONTEST CORNER: Postcards are flowing in for our 1991 stock market contest. To enter, mail your postcard (no letters accepted) with your prediction for the Dow Jones closing average on Dec. 31, 1991, with your name, address and home phone number to Dow Jones Ticker Contest, P.O. Box JW-6000, Baltimore Evening Sun, 501 N. Calvert St., Balto. 21278. No decimals, just a whole number.

If you're closest, you and friend will have dinner as guests of Mr. and Mrs. Ticker at your favorite area restaurant. (We've been everywhere from The Red Horse Inn, Hagerstown ($98 for four) to The Hamptons, Harbor Court ($245). Second closest wins ditto for lunch. The next 10 nearest forecasters will receive copies of the latest Maryland Business Almanac published by The Sun.

Cards must be postmarked by midnight, Sunday, Jan. 27, 1991. One card per person. You may give reasons if you wish, but they are not required. Get busy!

LOCAL MAILBAG: Myron Oppenheimer, Security Trust (Maryland National Bank) will mail Strategy Update if you phone 244-6569. ("While the Jan. 15 deadline is significant, we remember that we are long-term investors. Stocks appear fairly valued, the economy continues slow and inflation is still not a problem. We'll use any weakness to buy quality stocks and bonds for the long term.") . . . Phone Marvin Fribush, Paine Webber (576-3200), for "Yield-Enhancement Strategies: Positioning for the Recession." . . . Legg Mason (539-3400) will send new opinions on Black & Decker, Loyola Capital and MNC Financial . . . Contact Rex Rehfeld, Gruntal & Co. (727-0522) for his latest letter ("With long-term interest rates declining, high-quality bonds should outperform stocks over the next several years.")

HOPEFULLY HELPFUL: "Don't donate an asset to charity that has depreciated to less than your cost; it's better to sell it and donate the proceeds." (Ernst & Young) . . . "How many investors would pay a commission of $800, $1,000 or more on a $5,000 stock purchase? Not many, but it does happen. That's often the spread between bid and asked prices." (Moneypaper, Jan.) . . . "When you buy a municipal bond, be sure to ask for 'call' provisions, and leave the bond with your broker who is responsible for tracking calls." (Wall Street Journal) . . . "One way to avoid the 10 percent penalty for early IRA withdrawal (before age 59 1/2 ) is to take the money in equal periodic installments." (Forbes) . . . For $2.50 a minute, consumers may now telephone A. M. Best & Co. for its evaluations of strength and performance of 3,700 insurance companies. Dial 1 (900) 420-0400 . . . "A person aged 35 who put $2,000 a year for 15 years in an investment that grew by 10 percent a year would accumulate $292,000 by age 65." (Pioneer Group) . . . "Always try on jeans before you buy; sizes on the label are often different than actual sizes." (University of Minnesota study) . . . "Accomplish a large task by breaking it down into its smallest components." (Bottom Line)

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