Heartened investors send Dow to record

The Ticker

October 26, 1993|By Julius Westheimer

Encouraged by Clinton administration forecasts of a rosier economy, investors pushed the Dow Jones industrial average to a record high yesterday. The blue-chip indicator forged ahead from the start, surging 24.31 points and closing at 3,673.61. The closely watched index now stands 373 points, or 11 percent, above its New Year's Day level.

WHERE FROM HERE? "I see the Dow Jones average reaching 4,000-4,700 in the next few years; my earnings forecasts are quite optimistic and I feel interest rates will continue to decline." (Elaine Garzarelli on "Wall Street Week With Louis Rukeyser." She correctly predicted the 508-point crash six years ago this month) . . . "When I trace back the level of the Dow Jones industrial average, there has never been a time when the market has been at this overvaluation level when we didn't have a devastating decline." (Geraldine Weiss, Investment Quality Trends, in Money, November issue) . . . "Don't go for fads, fancies and esoteric stuff in this market. There are plenty of good values around in the good, solid, familiar stocks like American Home Products, Coca-Cola, Morgan Stanley, Gillette and Merrill Lynch." (Laszlo Birinyi, financial consultant) . . . "Instead of spending time reading about which U.S. stock funds have performed the best in the past year or five years or 10 years, it's more worthwhile to search for the lowest-cost, best-managed stock index fund that meets your needs." (Stuart Kaye, pension fund manager, in "Less Pain, Nice Gain" in Barron's, Oct. 25.)

BALTIMORE BEAT: Loyola Capital Corp. is the subject of a Legg Mason new research report which the firm (486-8010) will send you. ("Loyola's management has done a better-than-average job of avoiding credit quality problems, developing sources of fee income and managing the balance sheet. The stock is fully valued but don't ignore the takeover factor.") . . . McCormick is written up in Money magazine, November, under "Finding Winners in Your Kitchen." ("People are using more seasonings as they avoid fat and salt, and Americans are eating more spicy ethnic foods such as Indian, Mexican and Cajun." Alex. Brown's Steven Rockwell, quoted in the article, feels that expansion overseas, which accounted for about 22 percent of sales last year, is another big plus for the local spice giant . . . The T. Rowe Price New Asia Fund, which provided a 37.8 percent recent one-year return, is listed under "Foreign Funds Led The Way" in U.S. News & World Report, Oct. 25.

MARYLAND MEMOS: "Eastern Savings Bank (Md.)" is listed under "Best Savings Yields in the U.S. for 5-Year CDs" in Money, November . . . Cosmetic Center, Allied Irish (parent of First National Bank) and MBNA reached 12-month highs recently . . . Under "The 400 Richest People in America" (Forbes, Oct. 18), we find these Maryland names: "Blaustein Family, Baltimore, worth $1,200 million, primary sources: inheritance, oil," "Franklin Parsons Perdue, Salisbury, worth $450 million, primary source: chickens" and "Bernard Francis Saul II, Chevy Chase, worth $300 million, primary source: inheritance." . . . Washington Gas Light is listed under "Gas Utility Stocks Remain Attractive" in S&P Outlook . . . Reminder: Since we return to Eastern Standard Time next Sunday, be sure to get new Amtrak and airline flight schedules. You may secure train timetables from Penn Station, and be placed on the free "BWI Flight Guide" mailing list by writing to BWI Airport, Marketing and Development Office, P.O. Box 8766, BWI Airport, Md. 21240-0766.

DOW 5 UPDATE: Over 20 years, as we have stated, the "Dow 5" strategy -- buying the five lowest-priced of the 10 highest-yielding Dow Jones stocks and adjusting the list every year if necessary -- returned 5,800 (no misprint) percent. Stated BTC another way, $10,000 invested in the strategy in 1973 is now worth about $580,000. Looking at just the one-year results on the anniversary of recognizing this technique, since late October 1992, a "Dow 5" investment returned 38 percent, whereby a $50,000 commitment, say, is now worth about $69,000. One year ago the "Dow 5" stocks were American Express, Eastman Kodak, General Motors, Union Carbide and Woolworth. Today they are Merck, Philip Morris, Union Carbide, Woolworth and Du Pont.

Ticker note: Regarding the above, it was the discipline of forcing yourself to buy equal amounts of high-quality, temporarily unpopular Dow Jones stocks every year that made this exercise work. No guarantees for the future!

HOPEFULLY HELPFUL: National Business Employment Weekly, dated Oct. 22-28, on newsstands this week ($3.95 and worth it), runs a helpful article, "How to Take Charge of Your Career After a Layoff." Excerpts: "Don't charge into 'hyper-control' ("I'm going to lose 30 pounds, dump my spouse, sell my house, find a new religion") or lapse into passivity ("I'll be a couch potato, watch daytime TV in my pajamas, write 23 versions of my resume.") . . . Employers don't want to hire loose cannons or unguided missiles; they're looking for employees who can explain what they want. . . . The question, 'Tell me about yourself' should trigger a succinct inventory of your skills, abilities and things you've done well. . . . The key to effective self-presentation is practice. . . . Networking is the best way for you to expose your diverse menu to a variety of people. . . . There is no such thing as an efficient job search; just do it!"

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