There are plenty of bulls still around

The Ticker

April 14, 1994|By Julius Westheimer

Staging a partial comeback after an early afternoon 50-point sell-off, the Dow Jones industrial average fell 20.22 points yesterday and closed at 3,661.47. Despite some recent nerve-wracking plunges, the Dow index is now down only 92 points, or 2.5 percent, from its New Year's Day level.

NO PANIC HERE: The Rothschild Co., a leading Baltimore advisory firm, sends a reassuring letter to clients. Excerpts: "Bond investors were 'spooked' by the recent Federal Reserve decision to moderately tighten short-term rates . . . The bond market decline, which produced higher interest rates, caused considerable concern among equity investors, who quickly locked in profits from the three-year bull market . . . Concerns of accelerating inflation appear overblown . . . Our strategy is to 'Stay the Course' . . . We are either adding to existing holdings or purchasing stocks of companies which will produce above-market earnings growth but which are selling at reduced earnings multiples . . . We continue to approach our task in the same manner as in all uncertain times. Our high-quality, mid-cap growth approach has served us and our clients well for many years."

RAGING BULLS: "Is it time to exit this market? No! Our indicators still point to a greater than a 15 percent rise in the Dow industrials to the 4,300 to 4,500 level in the months ahead." (Prudent Market Decisions) . . . "We are near the end of the correction. Stocks will remain in a bull market until inflation rises above 5 percent a year." (Business Cycle Monitor) . . . "The market is staging its biggest correction in over a year, but it is just a bull market correction, not the beginning of a bear." (Walter Deemer's Strategies & Insights) . . . "Bond rates will trend lower and stocks will head higher." (Christopher Farrell, Business Week, April 18.)

THE BEAR SIDE: "We have squeezed as much as possible from this bull market, which began in 1990, and it's now time to become defensive and cautious." (Kidder Peabody's Market Commentary) . . . "You ain't seen nothing yet. This market could decline 50 percent from its high. I took a taxi the other day and the driver said he was investing in 'derivatives.' Remember Joe Kennedy and the shoeshine boy? When he learned the shoeshine boy was in the market, he got out." (Charles Allmon, Growth Stock Outlook, Bethesda) . . . "The Dow Theory is flashing a warning sign. It looks as if this could be the beginning of a real bear market." (Mark Hulbert in Forbes, April 25, on newsstands this week) . . . "Three years of fun with U.S. stocks are over; sell on any rallies." (A. Gary Shilling, same Forbes.)

MIDDLE GROUND: "What should an investor do now? He/she should do very little. The correction is not yet over, but, more important, neither is the bull market." (David Dreman, author, "The New Contrarian Investment Strategy.")

BALTIMORE BEAT: Legg Mason's April "Investor's Dozen" includes Ameron, Durakon Industries, Figgie International, Hi-Lo Automotive, Hooper Holmes, Independent Bank Corp., Interstate Power, Kranzco Realty Trust, Neutrogena, Ross Stores, Shawmut National and Telefonos de Mexico. Gerald Scheinker, 486-8010, or any Legg Mason representative will send you the full "Investment Update." . . . "We will shortly find out whether new investors in stock mutual funds understood what they were buying, and therein could lie further downward price pressure." (Investment Counselors of Maryland, Craig Lewis) . . . Phone Harry B. Gorfine Co. (539-5474) for its latest report, "How Adding to Your Mortgage Payment Can Save You Money."

HOPEFULLY HELPFUL: "Did you realize that you don't have to pay a store to rent movies? You can borrow them free -- at the same place where you get books for free: the public library. Many libraries also lend audio tapes and CDs." (Dollar Stretching Ideas) . . . Want to teach your teen-ager the basics of responsible money management? Send a stamped, self-addressed business-size envelope to Consumer Federation of America, Attn: Teaching Your Children How to Save and Spend, 1424 16th St. NW, Suite 604, Washington, D.C. 20036. It's free . . . The Kiplinger Washington Letter, April 8, says these fields now look most promising for college graduates: Physical/occupational therapists, nurse practitioners and anesthetists; computer network specialists; data base administrators; safety and health engineers; chemical and electrical engineers; paralegals.

NOTES & QUOTES: "Women entrepreneurs are forming small businesses at twice the rate of men." (Business Week, April 18) . . . "Federal Reserve Chairman Alan Greenspan thinks that by raising interest rates now, he fended off a Japanese-style crash later in the year." (Same Business Week) . . . "Best credit cards for establishing credit (cards with low overall costs when you carry balances, or low minimum deposits) are Citibank (800-743-1332), First Consumers National Bank (800-876-3262), Orchard Bank (800-873-7307) and Signet Bank (800-333-7116.)" (Kiplinger's Personal Finance magazine, May) . . . "An auto salesperson can spot a buyer with new car fever a mile away. If you stubbornly cling to the 'car of your dreams,' it will melt your bargaining resolve. Unless the salesperson realizes you're willing to shop elsewhere, you're unlikely to get the lowest price quote." (Consumer Reports, April) .

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