Nostalgic notes: Dow, Democrats

The Ticker

July 16, 1992|By Julius Westheimer

The Dow Jones average fell 13 points yesterday, closing at 3,345.42. For comparison, 20 years ago on July 12, 1972 -- the day the Democratic National Convention in Miami Beach nominated George McGovern for president -- the Dow indicator closed at 923.69. On July 14, 1960, the day John F. Kennedy was nominated in Los Angeles, the DJ index closed at 631.32.

LATEST COMMENT: "We expect the Dow Jones average to fall to 2,500 where the dividend yield is 4 percent, but stocks won't really be undervalued until the yield rises to 6% at Dow 1,700." (Investment Quality Trends, Geraldine Weiss) . . . "Our stock barometer remains at a very bullish 100 percent reading; environment is very favorable for stocks." (Pring Market Review) . . . "Our latest 'Big Money' poll of institutional money managers shows a sharp mood change; bulls are declining, bears climbing." (Barron's, July 13.) . . . "I'm bullish short-term; whenever everybody is so negative you get a significant rally." (Robert Kahan, Montgomery Securities) . . . "I'm not enthusiastic; fundamentals are not in place to drive the market higher." (Neil Hokanson, financial adviser).

WHAT TO DO: "For getting maximum return with safety, long-term corporate bonds are the best game in town." (Ben Weberman, Forbes, July 20) . . . "Cyclical stocks are hot; growth stocks are not. Both groups look promising right now." (Dreman Value Management) . . . "High yields are sparking interest in public utility stocks; the attraction is that dividends hopefully will increase over time." (Barron's, July 13)

LOOKING AHEAD: "The stock market's recent malaise will soon give way to a rally if President Bush picks up in the polls. Analysts at Ned Davis Research found that in presidential election years from 1900 through 1988 the Dow likes stability, and when it smells an old friend heading back to the White House it surges in anticipation, rising 14 percent from June through December in years when the incumbent party wins. But when the market senses a bedraggled incumbent slouching toward a concession speech, stocks end the year with an average 2.8 percent loss." (Fortune, July 27)

BALTIMORE BEAT: Phone Dean Witter's Stephen Stauffer (592-3164) for his firm's latest Strategem Letter. Excerpts: "Market timers win and lose but long-term investors always win . . . Stocks have consistently provided the highest total return of any financial asset . . . Stocks outperformed bonds in six of the last seven decades . . . If you had invested $2,000 in the stock market every year for the last 20, on the day the market peaked, your money would have more than quadrupled." . . . "We do not attempt to 'time' the stock market, but the overall risk is probably limited. Bear markets don't start when the Fed is pushing rates down and pumping liquidity into the system. Bull markets, on the other hand, do." (Investment Counselors of Maryland.)

HEAT WAVES: The top insured money market and CD yields locally are at Custom Savings, Chevy Chase Savings, Equitable Federal Savings, Washington Savings Bank and Loyola Federal. (Data from 100 Highest Yields) . . . Although the cereal crisis -- to which Ticker readers responded generously -- is temporarily over, Our Daily Bread soup kitchen still needs sugar, tea, peanut butter, sandwich bags and money. The address is 411 Cathedral St., Balto., Md. 21201 . . . With interest rates on short-term Treasury bills now down to about 3.2 percent, their lowest levels in more than 20 years, remember that Series EE savings bonds pay 6.3 percent if you hold them for 5 years. The rate holds until Nov. 1. . . "When it comes to snagging a bargain mortgage, there's no time like the present. Last week, mortgage rates sank below the 20-year low they hit in January." (U.S. News & World Report, July 20) . . . "Major third-party candidates tend to insure loss by incumbents; bear markets always seem to follow." (Smart Money, July)

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