Dow down, but S.& P., NASDAQ up

The Ticker

January 14, 1993|By Julius Westheimer

Unshaken by the outbreak of Persian Gulf hostilities, stock markets moved higher yesterday. The Dow Jones industrial average edged up 1.08 points at close at 3,263.56, the S.& P. composite index advanced and the NASDAQ over-the-counter average reached an all-time high.

WHAT NEXT? "Look for a high in February, a low near mid-May, another high in July and a major low between Aug. 17-25. Then expect higher prices into fall and 1994." (Jeff Bower's Guru Revue) . . . "For 1993 the odds favor a down year like 1953 or 1973. Overvaluation, lack of money-supply growth, poor balance sheets and the need to raise tons of equity money indicate heavy downside risks." (Ned Davis's Stock Market Strategy) . . . "We remain bullish as the new year begins. We continue to project more gains into the Dow Jones 3,400-3,600 range." (Bob Brinker's Marketimer) . . . "The only person who is wise about the future is the person who keeps silent." (John Kenneth Galbraith, 1986)

LOOKING AHEAD: "January will be a bad Wall Street month, February a better one. But when things look obvious, people shouldn't always go that way. Right now, for example, don't dump money funds and buy stocks. Last year, people sold stocks and bought money funds, and they were wrong, too." (Howard "Pete" Colhoun) . . . "Stocks will continue to outperform bonds. Buy the autos, health care and growth issues." (Carter Randall) . . . "The new president must press for an investment tax credit. Raising taxes on the rich will mean little. And we shouldn't lower taxes on the middle-income group." (Henry Kaufman, former Salomon Bros. interest rate guru.)

SURPRISE ENDING: "In a departure from my normally pessimistic outlook, I believe 1993 will be a great year -- good, real growth, low inflation. The recession and recent weak recovery set the stage for 1993's projected expansion. Although the recession hurt many people, it had a good side: costs dropped, debt paid down, inflation subsided . . . The current market upswing began in October 1990, when the outlook was horrible: Iraq war beginning, banking system in shambles, economy entering recession, stocks down 20 percent. Now it's the opposite: we're involved in humanitarian aid, banks just finished a record year, economic outlook excellent and stocks moved up in the last two years. Time for a decline?" (Joseph Wikler, Research Director, Rothschild Co.) Phone 539-4660 for full letter titled, "Let the Good Times Roll."

BALTIMORE BEAT: Smith Barney's Rick Faby sends "Top 25 Stocks Since 1987 Market Peak," with these leaders, in order, and total return percentage gains in parentheses: Amgen (1,245 percent); Home Depot (1,239); Novell (880); Nike (739); U.S. Surgical (709); Cooper Tire & Rubber (690). Phone Mr. Faby, 494-1853, for complete list . . . Baltimore Security Analysts will meet Wednesday at the Sheraton Hotel downtown at noon, with Susan D. Martin, CFA, speaking on "Performance Standards for Association for Investment Management and Research." Meetings: Feb. 3, RJR Nabisco and Feb. 18, MCI Corp . . . "We are constructive about 1993 stock returns but at current valuation levels, there is not much room for earnings disappointment or for higher interest rates. In 1993, success is dependent on individual stock selection and may be unfriendly to passive management styles." (Investment Counselors of Maryland, Craig Lewis)

MIDWINTER MEMOS: If you would like to have dinner or lunch for two as guests of Mr. and Mrs. Ticker, be sure to enter our Dow Jones forecasting contest. Complete rules were listed in Tuesday's Ticker, Jan. 12, and will be repeated next week . . . Fortune, Jan. 25, gives these "9 Steps to Investment Safety:" Pay off credit card debt; reserve no more than six months' income for emergencies; refinance your house; establish a home-equity credit line; use flexible spending accounts; rejigger your insurance; automate your saving painlessly by authorizing a mutual fund to extract money each month from your checking account; use tax-deferred savings plans to the maximum; invest in education -- your own." . . . The New Yorker, Jan. 18 issue (I finally found an error, page 41; see if you can find it) runs one of its rare business stories, this one about the proposed British Airways-U.S. Air takeover . . . MNC Financial (Maryland National Bank) stock is listed under "1992's Best Performers" in S&P Outlook, Jan. 13 issue.

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