With our shift to printing Ticker on Tuesdays and Thursdays rather than on Mondays and Thursdays, we devote today's column to some Tuesday financial happenings:
THIS TUESDAY: "I give the Dow Jones average a better than 50-50 chance of reaching a close above its previous 3,413 high by September." (John Martone Letter) . . . "Expect the stock market to play catch-up ball with big gains from bonds in the months ahead." (No-Load Mutual Fund Selections) . . . "The market looks fairly nasty this coming week with a possible important low Aug. 17-20." (Crawford Perspectives) . . . "Every 10 or 20 years there comes a time when the primary trend in stocks turns down. That's where I see us today." (Principles and Fundamentals) . . . "This is the 10th anniversary of the Grand Bull Market and if 10 years is the longest any bull market has lasted, treat sell signals with more than normal respect." (Universal Economics).
TUESDAY BRIGHT SPOT: In "The Great Crash" by John Kenneth Galbraith we read, "In early October, 1929, stocks were driven down as waves of selling engulfed the market (but) on Tuesday, October 22, influential banker Charles E. Mitchell proclaimed, 'the stock market decline has gone too far,' adding, 'conditions are fundamentally sound and the situation will correct itself if left alone.' "
TUESDAY NIGHTMARE: The book continues, "But Tuesday, October 29, 1929, was the most devastating day in the history of the New York stock market and it may have been the most devastating day in the history of markets. Selling began as soon as the market opened. Great blocks of stock were offered for whatever they would bring. Air holes, which bankers were supposed to close, opened wide. Averages plunged, canceling all of the gains of the 12 wonderful months preceding."
(Looking back, I find that the crash that set off the Great Depression took the Dow Jones average down from its Tuesday (!) Sept. 3, 1929, pre-crash 381 peak to its 41 low in July, 1932 (decimals dropped), an 89 percent plunge. The Dow did not regain its pre-crash level until Tuesday, Nov. 23, 1954, a quarter ofa century later.)
ANOTHER TUESDAY: On Tuesday, Oct. 20, 1987, Wall Street was busy picking up the pieces from the "Black Monday" 508-point crash, the day on which the Dow Jones average plummeted from 2,246 to 1,738. That last figure proved to be the low of the decline, from which point the Dow worked its way back within 15 months.
TUESDAY'S RECORD: How do Tuesdays perform in Wall Street? The 1992 Stock Trader's Almanac says that, over the past 40 years, Tuesdays have risen over Monday's closing level only 52 percent of the time, next to the lowest performing day of the week (Mondays).
TUESDAY TIDBITS: Speaking of the 10-year bull market that began a decade ago last Wednesday, the Dow Jones average closed on Aug. 13, 1982, at 776 vs. 3,331 a decade later. In that 10 years Coca-Cola soared from 2 to 43, Merck from 2 to 53, Philip Morris from 6 to 80, Disney from 3 to 35, Procter & Gamble from 10 to 48 and U.S. Surgical from 4 to 73. (Prices adjusted for splits, fractions dropped.) . . . This Tuesday, the highest insured money market and CD rates locally are at Maryland National Bank, Custom Savings, Washington Savings Bank (Waldorf), Loyola Federal, Chevy Chase Savings and Equitable Federal Savings (Wheaton). Data from "100 Highest Yields." . . . Barron's, dated yesterday, reports that the price/earnings ratio on the S&P 500 stocks now stands at 26 times earnings vs 19.5 times one year ago. . . . In last week's generally lower market (Dow Jones average off 61 points), Potomac Electric Power reached a 12-month high. If you had bought Pepco stock 10 years ago you would now be receiving a 23 percent return on your investment, plus tripling your money. . . . "A new University of Illinois study finds that there is no evidence of a June-August summer rally." (Forbes, Aug. 3) . . . McCormick & Co. is mentioned in S&P Outlook, Aug. 12: "Sales and earnings of this leading spice company should improve on volume gains and stable raw material costs." . . . H.& R. Block, H. J. Heinz, Merck, Philip Morris, Sara Lee, Wal Mart and Waste Management are included under "Favored Growth Stocks" in same Outlook, and Kimberly Clark Ltd. Inc. and Newell are mentioned under "Growth Stocks with Superior Dividend Records."
"Hereditary wealth is in reality a premium paid to idleness." (William Godwin) . . . "The only thing wealth does for some JTC people is to make them worry about losing it." (Comte de Rivarol (1753-1801) . . . "Those who own the country ought to govern it." (John Jay).