Stocks are steady despite increase in prime rate

The Ticker

March 24, 1994|By Julius Westheimer

Despite the fact that several large banks raised their prime lending rates yesterday, stocks behaved surprisingly well. The Dow Jones industrial average hung onto a 6.91-point gain, closing at 3,869.46. Stocks generally sink when interest rates rise -- which rates have been doing -- because investors feel safer in higher-yielding T-bills, bonds, CDs, etc., than in more volatile stocks.

AMONG THE TOPS: With the help of a magnifying glass, I extracted these local company names from Business Week's current (March 28) cover story titled, "The Business Week 1000 -- America's Most Valuable Companies." Each firm's "rank in market value" follows the company name: BG&E 298; Black & Decker 532, Delmarva Pow er & Light 624; Giant Food 564; Martin Marietta 227; McCormick 522; Manor Care 548; Mercantile Bankshares 884; Mid-Atlantic Medical 941; Procter & Gamble (parent of Noxell) 9; T. Rowe Price 851; Rouse 889; USF&G 679.

HOPEFULLY HELPFUL: "Mutual funds offering instant diversification and specialized management are valuable vehicles for many investors under many circumstances. Nevertheless, just as an investor in individual stocks must be informed and knowledgeable about his/her holdings, fund investors must understand the nature of and risks inherent in their funds. A survey of fund buyers showed an astounding lack of knowledge about the funds they owned. Of those surveyed, 30 percent thought funds sold by banks were insured, and 49 percent believed that funds sold by stock brokers were federally insured." (Dick Davis Digest)

DOING WELL: These local stocks reached new 12-month highs in recent trading, including some which touched peaks in "down" markets: Baltimore Bancorp (being bought by First Fidelity Bancorp), Columbia Real Estate, Crown Central Petroleum B, Griffith Consumers, Mid-Atlantic Medical. The little letter "u" next to the listings under "Sun Stocks" identifies a 12-month high, a little "d" spotlights a yearly low.

MARCH WINDS: "[Even] if you had invested $5,000 at the market 'peak' each year since 1954, you still would have made millions." (Money magazine, April, in a good article, "The Secret to Successful Investing") . . . If you had invested $10,000 in U.S. Treasury bonds one year ago, you would have beaten out a similar investment in U.S. stocks, $10,662 to $10,490. In an average holding of foreign stocks you would now have $13,656 . . . A home in Baltimore is listed 27th among 50 cities under "Real Estate Price Forecast" in Money magazine, April, showing the median price here to be $117,900. A 3.5 percent 12-month price gain in this area is projected.

WORKPLACE WISDOM: Here, from Fortune, April 4, are "Eight Keys to Career Self-Reliance": "The overarching principle: Think of yourself as a business; define your product or service; know your target market; be clear on why your customer buys from you; as in any business, drive for quality and customer satisfaction; know your profession or field and what's going on there; invest in your own growth (what new products will you be able to provide?); be willing to consider changing your business or starting a new one." . . . National Business Employment Weekly, March 20-26, on newsstands this week, runs a cheerful story "Why Recruiters Are Smiling: They are Forecasting Red-Hot Hiring Activity."

LOOKING BACK: "The Value Line stock ranking system is perhaps the most widely-known stock selection tool, and its performance over the last 13.5 years is one major reason why. It ranked No. 1. But I worry that its popularity will also be a curse; with so many people following the system, it will have a harder time in the years ahead. In order, from the top, here is the ranking of other newsletter stock performance recommendations over the last 13.5 years: The Chartist, Zweig Forecast, Prudent Speculator, Value Line OTC Special Situations, BI Research, Zweig Performance Ratings Report . . ."(Hulbert Financial Digest.)

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