Investors take heart, send Dow up 27

The Ticker

July 15, 1993|By Julius Westheimer

Encouraged by lower interest rates, falling oil and gold prices and a steady June consumer price index report, investors pushed stock prices higher yesterday. The Dow Jones industrial average gained 27.11 points to close at 3,542.55, only 12 points below its all-time peak. Long government bond yields fell below 6.6 percent.

WALL ST. WISDOM: "Bulls and bears aren't responsible for as many stock losses as bum steers." (Olin Miller) . . . "There are only two emotions on Wall Street: fear and greed." (William Lefevre) . . . "In economics, the majority is always wrong." (John Kenneth Galbraith)

BALTIMORE BEAT: Black & Decker's CEO Nolan Archibald is listed under "Harvard Business School Alumni" in the July 19 Business Week cover story about prominent graduates, the future of the B-School, etc. . . . Stocks with local connections which hit 12-month highs recently include General Motors, Martin Marietta, Mid-Atlantic Medical, Baltimore Bancorp and Marriott . . . The following local banks and savings and loans are listed in TC the latest issue of "100 Highest Yields" for top-yielding insured CDs: Eastern Savings Bank, Loyola Federal, Chevy Chase Savings, Washington Savings Bank (Waldorf) and Equitable Federal Savings (Wheaton) . . . "134,000 children in Maryland are going hungry," says the Maryland Food Committee Monitor. Call 366-0600 if you would like to help feed some of them.

MIDMONTH MEMOS: Want to know more about the financial planner you use or are considering using? Phone the Institute of Financial Planning, Denver, Colo., 1-303-220-1200 . . . Call Legg Mason (539-3400) for the firm's July Quarterly Health Care Monitor . . . Dean Witter's Rick Faby (547-7000) will mail "What's the Value of Tax-Exemption if President Clinton's Tax Plan Becomes Law?" The letter has specific examples . . . Phone David Clogg, Chapin, Davis (435-3200) for results of the firm's "Stocking Stuffers" stocks recommended last November. The list gained an average 12.6 percent . . . "Real Estate Investment Trusts (REITs) are now attractive investments because, for the first time in 20 years, interest rates and capital costs have dropped to levels below yields obtained from rental properties." (Kemper Securities Equity Roundup)

NOTES & QUOTES: "Millions of Americans wonder when their next real raise will come through. Not soon. What many can look forward to are recognition rewards." (Fortune, July 12) . . . "What we are facing is 'stagflation,' that nasty situation which combines a weak economy and lower earnings with rising inflation and higher interest rates. Therefore stocks and bonds are at or near major top areas." (La Loggia's Special Situation Report) . . . "With the U.S. market at overvalued levels by historical standards, investors should consider looking at convertible securities as attractive alternatives to stocks. We like Chock Full O'Nuts and Delta Air Lines." (Moneypaper) . . . "Understanding Mutual Funds for Investors Over 50" is yours free by writing AARP Investing Program, Box 5014, Janesville, Wis. 53547, or phoning 800-322-2282, ext. 4884.

HOPEFULLY HELPFUL: "From 1962 to 1992, Japanese stock prices rose 23-fold. Now China looks like a growth powerhouse." (Mutual Fund News Service) . . . "Discuss tax consequences whenever you do something different in your life -- investments, a new car or home, divorce or marriage, even a vacation. Example: your tax accountant knows how, by spending some vacation time working, you may be allowed to deduct a portion of the cost." ("Waiting To Win The Lottery: The Baby Boomers' Money Manual" by Luki Vail, financial planner, $12.95) . . . "Beware of the 40-year mortgage. Some lenders now offer them, which require smaller monthly payments than conventional 30-year loans. But the short-term savings may not be worth the long-term cost." ("The Common-Sense Mortgage" by Peter Miller, $10.)

STOCK WATCH: "The peak in the broad market that has been masked by a rising Dow Jones average is about as classic as any top we have ever seen, with the prospects for a collapse back under 3,000 as certain as any move could ever be." (Inger Letter) . . . "Margin lending surged in the first quarter to a record $45 billion, 16 percent higher than in the same period in 1992. Lest we forget, heavy margin lending preceded the stock market crashes in 1929 and 1987. The current level is considerably higher than the peak set a month before the '87 crash." (Investment Quality Trends) . . . "The best news for stocks is that long-term bond yields have plummeted into record low territory, a move very bullish for Wall Street." (Louis Navellier's MPT Review) . . . "A major 'red flag' for investors: Mutual funds have become much too popular in the past two years. . . . Historically, mutual fund booms have occurred just prior to major bear markets." (The Personal Capitalist)

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