U.S. bond rates plunge to 5.94%, a 16-year low

THE TICKER

September 07, 1993|By JULIUS WESTHEIMER

Following another sharp drop in interest rates Friday -- rates on long government bonds sank to 5.94 percent, a 16-year low -- stocks edged higher. The Dow Jones industrial average gained 7.83 points in the week's final session but slipped 6.70 points for the week to close at 3,633.93, about 18 points below its record high.

WALL ST. WISDOM: "In investing money, what you do should depend on whether you want to eat well or sleep well." (J. Kenfield Morley) . . . "A good scare is worth more to a person than good advice." (E. W. Howe) . . . "Take time to deliberate, but when the time for action arrives, stop thinking and go in." (Andrew Jackson.)

BALTIMORE BEAT: Highest-yielding insured local money-market accounts are now at Chevy Chase Savings, Loyola Federal, Eastern Savings Bank, Maryland National Bank and Washington Savings Bank, Waldorf. (Data from "100 Highest Yields," Aug. 30) . . . Baltimore Security Analysts Society hosts Don W. Myers, vice president and treasurer, General Public Utilities, Sept. 16, Stouffer Harbor Place Hotel at noon . . . "Wall Street Week With Louis Rukeyser" examines "The Fall Outlook for Stocks" this Friday at 8:30 p.m., channels 22 and 67, with guest Jeffrey Shames, president, Massachusetts Financial Services, and panelists Elizabeth Dater, Martin Zweig and Mr. Ticker.

BALTIMORE WARNING: Speaking of stocks, Gruntal & Co.'s Rex Rehfeld, writes, "The longer a market is overvalued, the greater the decline and the length of the ensuing bear market. Then most stocks decline, even those seemingly cheap in relation to earnings. And the more popular they have been, the more vulnerable they are to a decline. Many of those who agree that this market is being driven by the 'greater fool' theory believe they will know when it is time to exit, leaving all those greater fools to their just desserts. (That theory holds that even though a market is overpriced, there is a greater fool who will buy at even higher prices.) History suggests that there is no greater fool than the one who believes he or she can beat all of the other greater fools out of the stock market." Phone Mr. Rehfeld, 727-0522, for the complete letter.

BIRTHDAY BLUES: Although birthdays depress me -- not enough time left -- I checked back to see where the Dow Jones industrial average stood on the day I was born 77 years ago yesterday. I found that on Thursday, Sept. 6, 1916, the Dow closed at 94.51 on volume of 1.3 million shares. And on the day I was a Bar Mitzvah, Saturday, Sept. 29, 1929 (the market was open Saturdays then), the Dow indicator closed at 347.17. The Crash that set off The Great Depression began one month later and by July 8, 1932, the Dow index had sunk sickeningly to 41.22, its lowest point, from which level it took 22-plus years (to Nov. 23, 1954, to be exact) to regain its pre-crash 1929 peak of 381.17.

HOPEFULLY HELPFUL: From the latest "S.& P./Lipper Mutual Fund Profiles," August 1993, just received, here are the top performers for the last 5 years, in order: Vista Growth & Income, Fidelity Select Bio Tech, Fidelity Contrafund, Kauffmann Fund and Fidelity Equity Growth. For 10 years, in order, Merrill Pacific A, Prudential Utility B, CGM Capital Development, Fidelity Select Utilities and Fidelity Magellan . . . Speaking of mutual funds, David Tripple, The Pioneer Group, says, "Most top mutual fund performers fall badly the year after their No. 1 ranking. In the last 20 years, seven of the prior year's stars actually lost value. Reason: A top one-year performance usually means the fund bet heavily on a few types of stocks that did exceptionally well, leaving top-performers seriously exposed when trends change."

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