Dow slips 9 from peak, still up 9.2% this year

The Ticker

August 24, 1993|By Julius Westheimer

Backing away from Friday's all-time high, the Dow Jones industrial average slipped 9 1/2 points yesterday and closed at 3,605.98. At the final bell the Dow indicator stood 9.2 percent above its Jan. 1 level (3,301.11) and a whopping 79.4 percent above its finish only five years ago today (2,009.78).

WALL ST. WARNINGS: With the Dow index near its peak, we offer these words of caution: "Buy the right stock at the wrong time and you'll suffer great losses." (Peter Lynch in "One Up on Wall Street."). . ."Trees don't grow to the sky." (My father, a New York Stock Exchange member in the 1920s and 1930s) . . . "In Wall Street, the majority is always wrong." (John Kenneth Galbraith.)

LOCAL LINE: T. Rowe Price Maryland Bond Fund is listed under "Better-Acting Single-State Muni Bond Funds" in S&P Outlook, Aug. 18 . . . Legg Mason's Fred Yoder will conduct a seminar, "Retirement Investing," Sat., Aug. 28, 9 a.m.-11 a.m. Call 771-3455 for details . . . These local stocks reached 12-month highs in last week's trading: Alex. Brown, Allied Irish (parent of First National Bank), Baltimore Gas and Electric, Citizens Bancorp, Delmarva Power & Light and Potomac Electric Power . . . In Money magazine, September, these local firms are listed in the following "Banking Scorecard" categories: Leading 30-year fixed-rate mortgages: First National Mortgage; leading 30-year adjustable-rate mortgages: First Advantage Mortgage; leading car-loans: Bank of Baltimore; leading home equity lines: Bank of Baltimore.

HOPEFULLY HELPFUL: As income tax rates are scheduled to rise, most advises suggest that investors now consider tax-free municipal bonds. Speaking of tax-frees, Dean Witter's Rick Faby (547-7000) will mail "What's The Value of Tax Exemption Under President Clinton's Tax Plan?" showing, for example, that if you can buy a tax-free bond at, say, 5 percent, that rate equals a pretax 8.28 percent equivalent in the new 39.6 percent tax bracket . . . "The party is winding down for savers who locked in high-yielding Series EE savings bonds in the mid-1980s. Bonds issued from November 1982 through October 1986 have earned a guaranteed minimum rate of 7.5 percent, but the guarantee is beginning to expire. Although EE bonds pay interest for 30 years, the guaranteed minimum is good only for the original maturity period -- roughly the same time it takes for a bond to reach its face value at the guaranteed rate. For bonds guaranteed to earn 7 1/2 percent, that's 10 years." (Kiplinger's Personal Finance Magazine, August)

WORKPLACE WISDOM: National Business Employment Weekly, Aug. 20-26, publishes "Ten Commandments for Surviving Unemployment." Excerpts: "Thou shalt not let failure win. Thou shalt not abandon truth; people who lie about themselves in interviews or on resumes are playing Russian roulette. Thou shalt not be complacent; the only true satisfaction in a job hunt is landing a job. Thou shalt not covet thy friend's success. Thou shalt banish anger and despair. Thou shalt not lose confidence in thyself. Thou shalt remember that life isn't fair. Thou shalt not lose thy sense of humor. Thou shalt never forget the hard times; as Friedrich Nietzsche said, 'That which does not kill you makes you stronger.' Thou shalt not forget to love; being unemployed is stressful, but whatever happens, keep your head up and return people's innuendoes and stupid comments with love." If you wish to subscribe to this fine publication, dial 1-800-JOB-HUNT (1-800-562-4868).

LOOKING AHEAD: The following three quotes are from Friday's "Wall Street Week With Louis Rukeyser": "I know the market has had a big runup, but I'm still 'bullishly neutral,' and favor utilities, brokerage stocks, financial issues and the oils." (Martin Zweig) . . . "This is a great market for 'small-company' stocks; the best way to play this game is through mutual funds." (Greta Marshall) . . . "My favorite growth issues now are Intel, Applied Materials, Motorola, MCI Telecom, and Hong Kong Telecom. We're now invested 45 percent in stocks, the same in bonds and 10 percent in cash. We only sell when fundamentals change for the worse and we don't mind high P/E ratios if strong growth rates support them." (Guest Jeffrey Miller, managing director, Provident Investment Counsel, minimum account $10 million)

"Philip Morris is the best value in the Dow index. Overseas smoking habits are very different from ours, and they haven't cut prices there. The stock could rise 40 percent over the next two years." (American Heritage Fund manager Heiko Thieme, who achieved a 28 percent annual return in the last three years, in For tune, Sept. 6)

"I believe that there's going to be overwhelming pressure on the Fed- eral Reserve within the next three or four years to inflate and that in five years inflation will be much higher than now, as will long-term interest rates." (Milton Friedman, Nobel Prize-winning economist)

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