After Haitian peace, Dow rallies, fades

THE TICKER

September 20, 1994|By JULIUS WESTHEIMER

Following the peaceful resolution of the Haiti crisis, the Dow Jones industrial average opened with a 20-point surge yesterday, but the rally soon faded. The blue-chip indicator edged lower during the day but held onto a 3.37-point advance and closed at 3,936.72, only 42 points below its all-time high and 399 points above its 12-month low.

MARYLAND MEMOS: Alex. Brown and Legg Mason are included under, "Stocks of much smaller brokers than Merrill Lynch or Morgan Stanley, which are cheap and should rally," in Forbes, Sept. 26 . . . On Tuesday, Sept. 27, the Baltimore Security ZTC Analysts Society holds a program titled, "Benjamin Graham on Value Investing: Lessons From the Dean of Wall Street." The speaker will be Janet Lowe, author of a new biography of Mr. Graham. The meeting takes place at Stouffer Hotel, Inner Harbor, at noon. Why not ask your broker to take you as his or her guest?

BALTIMORE BEAT: U.S. Surgical stock, widely held in this area, is listed under "Insider Transactions: Sales," in Barron's, Sept. 19, on newsstands this week. The number of shares listed is 102,958 . . . "Sun Stocks" that reached 12-month highs recently include Danaher, Fusion Systems and Mercantile Bankshares . . . Beginning this week, I will broadcast a "Money Tip of the Day" at 6:15 a.m. each weekday, before I answer your call-in questions. I also take questions at 5:45 and 6:45 a.m., plus Saturday mornings at 8:15 a.m.

HOPEFULLY HELPFUL: "There's a danger in taking stock profits too soon. Prematurely selling a stock whose price is going up increases your risk by requiring a search for another stock as good as the one you just sold. A better strategy is to hold onto stocks that have good short-term price increases if their long-term outlook remains strong." ("The Nature of Risk: Stock -- Market Survival" by financial columnist Justin Mamis, $12.45.)

GOOD ADVICE: "Tomorrow's big winners usually appear in the list of new highs, not new lows. Every soaring stock hits a series of new highs; the earlier you get in, the more of the run you'll enjoy." (Investor's Business Daily) . . . "Everyone with earned income should make his/her $2,000 IRA contribution annually. It doesn't matter whether it's tax-deductible; with the right investments, the value of IRA tax deferral is reason enough." (Financial World, Sept. 27.)

FACE OUT: "To protect your money and yourself, be careful at public telephones. Do not turn your back on your surroundings -- always face out from the phone and stay alert. Phone booth stalkers, looking for your pocketbook, committed 27,000 crimes last year." ("Street Sense for Women" by Louis Mizell Jr. $4.50.)

BEATING THE STREET: "From 1972 to 1982 the stock market was flat, with the Dow Jones average barely budging. But investors in a Dow index fund would have collected a 70 percent total return (gain plus income) windfall because of rising dividends. When buying a stock, pay attention to a history of increasing dividends that boost returns in any kind of market." (Mutual Fund News Service.)

SAFE YIELDS: "The safest way to get more yield is to use a 'laddered' strategy. For example, spread $25,000 among one-, two-, three-, four- and five-year Treasury notes. As each $5,000 worth comes due, reinvest in five-year Treasuries. By constantly reinvesting in five-year notes, you will get a moderately high yield, and yet your portfolio will constantly near maturity, ready to cash in at little or no loss if you need money." (Moneypaper, Sept.)

FROM THE TOP: G. Kenneth Heebner, portfolio manager, top-performing CGM mutual funds -- CGM Capital Development Fund was No. 1 on the latest list of 10-year top performers -- said on "Wall Street Week With Louis Rukeyser" last Friday: "Buy real estate investment trusts (REITs) for income. Among them, I like Winston Hotels and Mid-America Apartment Communities. Also buy some cyclical commodity stocks like the papers, aluminums and commodity issues. Two of my favorites now are Stone

Container and Rexene, the latter a manufacturer of thermoplastic and petroleum products."

WATCHING WALL ST.: "This is the time to sell, not buy. This rally is a gift from the stock market gods. It offers investors the last chance to sell before the bear market resumes." ("Investment Quality Trends," Geraldine Weiss) . . . "We'll see higher stock and bond prices over the next three months. Conditions are not right for a large selloff. Bonds are especially attractively priced." (Core Quarterly Research Report). . . "I would buy Woolworth at this depressed price." (Frank Cappiello, Baltimore-based mutual fund manager) . . . "Dow 5,000? It's quite possible next year, based on solid historical precedents." (Smart Money.)

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