Wednesday loss snaps 4-day winning streak

The Ticker

June 16, 1994|By Julius Westheimer

Following bond prices lower yesterday -- long-term government issues fell about one point, or $10 per $1,000 bond -- the Dow Jones industrial average snapped a four-day winning streak and wiped out three-fourths of Tuesday's gain. The blue-chip index dropped 24.42 points to close at 3,790.41, but the Dow still stands 340 points above its 12-month low of 3,449.93.

COMMISSION-SAVER: Speaking of stocks, brokers won't like to read this listing, but here are names of some well-known companies that sell shares directly to investors with no commission charges. Company names are followed (in parentheses) by minimum investments and phone numbers, many of which are toll-free. Barnett Bank ($250) 800-854-5798; Exxon ($250) 800-252-1800; First Alabama Bancshares ($20) 205-832-8859; Kellwood ($100) 314-576-3100; Kerr-McGee ($750) 800-786-2556; Mobil ($250) 800-648-9291; SCANA, holding company for South Carolina Electric & Gas ($250) 800-763-5891; Texaco ($300) 800-283-9785; and US West ($300) 800-537-0222.)

DON'T PANIC: This development will cause consternation among many investors, but June 1, 1995, will mark the federal deadline for the switch to computerized, "paperless" trading of stocks and bonds. After that date you won't have the comfort of a sheaf of stock certificates unless you're willing to pay a fee for them. Also, the Wall Street Journal, June 7, reports that investors "should brace for a slew of computer glitches on their brokerage statements." But as far as Ticker knows, you won't have to rush to your safe deposit (yet) to pull out and turn in the three-share engraved AT&T certificate that Aunt Minnie gave you in 1935 and that you promised you'd never part with. We will keep you posted.

HOPEFULLY HELPFUL: "Buy mutual funds with very low operating costs. The only thing you can predict about mutual funds is that high-cost funds will underperform the competition. Also, buy index funds. That is, buy the whole market instead of a stock picker's expertise. Over the long term, you will be better off." (Burton Malkiel, Princeton economist) . . . "A 'Rest Assured' portfolio includes electric utilities as well as high-yielding stocks such as Exxon, Eli Lilly, Rochester Telephone and Washington Gas. Spread your high-income producing stock holdings as much as possible among companies with rising dividend streams." (Moneypaper, June.)

BALTIMORE & BEYOND: PaineWebber's Marvin Fribush will mail you his firm's "Treasury Bond Yields Still Set to Fall to 5 Percent by Turn of the Century" if you phone him at 576-3220. The booklet also has information on Puerto Rico municipal bonds and a section called, "Taking the Bite Out of Bond Losses." . . . Craig Lewis, Investment Counselors of Maryland, says, "If long-term interest rates remain fairly stable, as we expect, and if earnings continue to rise, then stocks would appear to offer better prospective returns than bonds or cash in the immediate future." . . . Merrill Lynch's Richard Rist writes, "Sometimes your radio and TV callers ask what to do with small amounts of money. Our funds will accept as little as $250 ($100 for retirement accounts) and $50 for subsequent investments." Call Mr. Rist (547-5000) for details.

MID-MONTH MEMOS: MBNA America (Del.) is listed under six-month, one year, 2 1/2 -year and five-year "Top-Yielding Certificates of Deposit" in Kiplinger's Personal Finance magazine, July. Phone 302-453-9930 for details. . . . Amerada Hess, AT&T, Citicorp, IBP (formerly Iowa Beef Packing), Johnson & Johnson, Morgan Stanley, Omnicom and Wal-Mart Stores are listed under "Stocks That Should Thrive in a Jittery Market" in Business Week, June 20. . . . This week's National Business & Employment Weekly (June 12-18) runs an encouraging story, "Hiring Expected to Rise Throughout the Summer." ("A survey of 15,000 employers found that 29 percent plan new hiring during the third quarter.") . . . "$10,000 invested with Warren Buffett in 1956 would be worth $60 million today." (U.S. News & World Report, June 20). The stock of Berkshire Hathaway, the holding company which Mr. Buffett manages, sells on the New York Stock Exchange for about $16,500 a share.

LOOKING BACK: Forbes, June 20, runs a chart headed "Stocks Win," with this 20-year performance ranking: Stocks, foreign exchange ("combines money-market returns with changes in exchange rates"), bonds, stamps, three-month Treasury bills, diamonds, housing, (Consumer Price Index falls here), farmland, gold, oil, silver. And for 10 years, in order: Stocks, bonds, foreign exchange, three-month T-bills, diamonds, housing, the CPI, gold, farmland, stamps, silver, oil. And for the last five years: Foreign exchange, stocks, bonds, 3-month T-bills, CPI, housing, farmland, silver, diamonds, gold, stamps and oil.

LOOKING AHEAD: "After falling 6.2 percent in the first four months of 1994, convertible securities look like good buys now. The average yield is 5.9 percent, and the amount you pay over the straight stock value has fallen from 30 percent to 24 percent in the past six months." (Fortune) . . . "There is a good chance that the recent correction ended on April 4 and the market can still make all-time highs this year." (The Prudent Speculator) . . . "We believe the market has further upside potential, but we will maintain adequate reserves to capitalize upon future buying opportunities." (Bob Nurock's Advisory) . . . "I believe next October holds the potential for a major downside disaster, but this will set up a great yearend rally you won't want to miss." (Professional Timing Service.)

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