Dow Jones bounces back, rises 19 to close at 3,511

The Ticker

June 17, 1993|By Julius Westheimer

Regaining all but three points of Tuesday's 22.69-point drop, the Dow Jones industrial average advanced 19.65 points yesterday, closing at 3,511.65. The S&P 500-stock index inched ahead, but the Nasdaq over-the-counter average slipped a bit.

WALL STREET WISDOM: "If the experts at this seminar disagree on many aspects of the economic and stock market outlook, you risk going away more confused than before you arrived. If, however, the experts largely agree on most aspects of the outlook, you will not go away confused, but there will be a real risk that the experts are wrong." (Robert Farrell, named No. 1 market timer by Institutional Investor magazine for 17 years, addressing the "Florida Money Show") . . . "Sure, I'm always wary. You have to be in this business. It's not a one-way street. I remember the '73-'74 bear market. I can't live with 30 or 40 percent losses." (Martin Zweig, interviewed in "Louis Rukeyser's Wall Street.")

BALTIMORE VIEWS: "Many consumer brand companies achieved a significant portion of earnings growth by raising prices. With discretionary income tight, this will now be difficult or impossible, as Philip Morris's cigarette price cuts illustrated. Our stock selections will continue to focus on those companies whose profits can be generated from efficient operations and growing unit volume, not rising prices." (First National Bank, Charles Knudsen)

LOCAL WARNING: "With a bleak economic outlook, what keeps the stock market aloft? The key is the relatively low level of interest rates. Talk of stock overvaluation and economic problems are not new, but they have been around so long that most people have stopped worrying about possible consequences. Warnings fall on deaf ears. Investors shovel money into hands of mutual fund managers. Rarely has a market's overvaluation been so universally ignored. Will Rogers said, 'I'm more interested in the return of my money than the return on my money.' Investors, take heed!" (Rex Rehfeld, Gruntal & Co. Phone 727-0522 for the full letter.

JUNE JOTTINGS: Tomorrow night, "Wall Street Week With Louis Rukeyser" spotlights mutual funds with guest Don Phillips, publisher, "Morningstar Mutual Funds" and panelists John Dessauer, Gail Dudack and Harvey Eisen . . . For Father's Day gifts, consider subscriptions to financial magazines such as Money, Kiplinger's Personal Finance Magazine and Forbes. Also books such as "One Up on Wall Street" or "Beating the Street" by Peter Lynch, "A Fool and His Money" by Jon Rothchild and "Sylvia Porter's Money Book" . . . "People with several retirement accounts at one bank may want to reconsider. Last month, the Federal Deposit Insurance Corp. decided to reduce its coverage of certain tax-deferred deposits from $100,000 for each of four types of retirement accounts per bank to $100,000 for all such accounts at a bank combined. For details, call 901-767-4754." (U.S. News & World Report)

HISTORY LESSON: "Why are defense stocks so buoyant recently? We would bet that, in part, the market is registering its affirmation of a thought put forward by Martin Marietta's canny CEO, Norman Augustine. Explaining why he was expanding his defense operations, Augustine told Fortune last February, 'I believe defense will come back. I read history books. Human nature has not changed.' " (Fortune, June 28)

MARYLAND & MORE: "Bank of East Asia, which trades on the Hong Kong stock exchange, has potential to be the stock of the decade." (Adrian Day, "Investment Analyst," Annapolis) . . . "I advise Treasury notes as mandatory holdings for all retirement portfolios. If you can invest $25,000 or more, I advise you to purchase individual Treasuries through a bank or broker. In the present environment, I prefer five- to seven-year maturities." (Richard Young, "Intelligence Report," Potomac) . . . "When it comes to becoming a successful investor, dividing your portfolio among stocks, bonds and money market instruments is critical. Your asset allocation is the fuel in the return engine." (John Cammack, vice president, T. Rowe Price) . . . "With stock prices in the stratosphere and interest rates bottoming, the current investment of choice for conservative investors is cash." (Personal Finance magazine) . . . "Not only are stocks unlikely to lose money over long time periods, they also do a dandy job of outpacing inflation. Stocks have returned 10.3 percent a year since 1925 vs. 5.2 percent a year for intermediate government bonds and an inflation rate of 3.1 percent annually over the same period." (Ibbotson Associates) . . . "Mutual funds are the best way to get into the stock market because they allow small investors to buy diversified portfolios run by professional money managers." (John Blankenship Jr.)

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