Dow eases 2.77 points as first half ends

The Ticker

July 01, 1993|By Julius Westheimer

Slipping a bit as the first half of 1993 ended, the Dow Jones industrial average eased 2.77 points yesterday, closing at 3,516.08. The Dow's gain in the first half was 6.5 percent.

At the halfway pole in our forecasting contest (dinners, lunches, books as prizes), the closest crystal-ball gazer is Andrea De Labio Chrest (3,515); followed, in order, by Dora Vacek (3,514); -- Cathy Miller (3,514); J. J. Hilsher (3,519); William O. Devilbiss (3,513); Erika Harold (3,513); John R. Kuhn (3,513); Steve Goldbloom (3,512); and Michael M. Panowicz (3,512.)

JULY JOURNAL: Business Week, July 5, runs a story on Westinghouse and its Baltimore-based Electronics Systems Group. Titled "From the Gulf War to the War on Crime," the story says, in part, "Struggling along with other defense contractors to adjust to the post-cold war-era, Westinghouse is gradually converting much of its military hardware for use by law-enforcement agencies to help offset the steady drop in Pentagon spending." . . . "Fifteen-year mortgages are the loan of choice for refinancers, who at current rates save $135,000 in interest on a $150,000 loan versus a 30-year mortgage. The rate discount for shorter loans is the highest in recent history." (Kiplinger's Personal Finance Magazine, July.)

BALTIMORE BEAT: Myron Oppenheimer, investment strategist, Security Trust Co./Maryland National Bank writes, "As in the story of the blind men and the elephant where each man's conclusion is based solely on the specific part he touched, perceptions of the current course of the economy also vary widely. Focus on the long term. When everything looks rosy, it is a time for worry. As long as there are negative investors around, there still are potential buyers. There is a lot of buying power left for the long term." (Phone 244-6569 for the full letter.) . . . Legg Mason, in its new 22-page Mid-Atlantic Review, comments on The Cosmetic Center, Black & Decker, Giant Food, Home Depot, Ryland Group, etc. Phone Gerald Scheinker (486-8010) for your copy.

MARYLAND MEMOS: Atlantafed Bancorp, Bell Atlantic (parent of Telephone Co.) and MBNA (credit card subsidiary of Maryland National Bank) reached 12-month highs this week . . . Tomorrow night, Owings Mills-produced "Wall $treet Week With Louis Rukeyser" runs its "Mid-Year Review" with panelists Elizabeth Dater, Harvey Eisen, James Grant and Michael Holland . . . Rick Faby, Dean Witter, sends along "Indications of the Impending Municipal Bond Supply Crunch of the Mid-1990's," concluding, "Outstanding supplies will diminish, probably the single most compelling reason for systematic accumulation of municipal bonds." Phone 547-7000 for your copy.

BY REQUEST: Here, updated, is the "Dow Five" successful stock strategy. "This well-known theory calls for listing the 10 stocks with the highest yields among the 30 Dow Jones industrials (The Wall Street Journal prints all the data daily.) Historically, these 10 issues have significantly outperformed the whole average. Once you list the 10 highest-yielders, buy the five stocks with the lowest prices. Low-priced stocks tend to outperform higher-priced issues. Adjust the list every year. (Mark your calendar). In the 19 years through 1991, the 30 Dow stocks had a total return (gain plus income) of 516 percent, but -- get this -- the Dow 5 strategy returned a whopping 3,293 percent (no misprint) return." (Dick Davis Digest)

AND NOW WHERE? About 60 percent of the newsletters, columns, etc., that I have read in the last few days are bearish. A cross-section of recent opinions: "The last gasp of the bull will occur well before this year is out." (Morris Markovitz, Morry On The Market) . . . "Relative to earnings, dividends and book values, the stock market is up there in La La Land. The present scenario reminds me of June-August 1987, just before the Big Crash." (Ian McAvity's Deliberations) . . . "Odds are that any market top appears further out in time and at higher levels." (Wall Street Generalist) . . . "It's time for the last hurrah. It may be a doozy. With falling oil prices and deficit-fighting governments in the news, it'll be tough to stay bearish." (Tick Talk) . . . "Our models have given the clearest and strongest sell signal in almost three years. Odds are high that the next selloff will exceed 20 percent." (Fractal Behavior of Markets) . . . "Despite all the chatter about a coming big selloff, I don't think it's going to happen. Too many people are looking for one." (Bill Staton's Money Advisory) . . . "It's getting harder and harder to push this stock market ahead." (Pro Trade) . . . "Gold stocks are being pulled out of orbit by the strong gravitational attraction caused by the smart money moving out of the stock market." (Granville Market Letter) . . . "The market outlook remains OK because only 32 percent of advisors are bullish." (Investors Intelligence)

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