Greenspan remarks encourage market

THE TICKER

March 09, 1995|By JULIUS WESTHEIMER

Encouraged when Federal Reserve chief Alan Greenspan testified yesterday, "Weakness in the dollar has been overdone" -- and gave no hint that the Fed would raise interest rates to defend the ailing currency -- investors pushed stock and bond prices higher.

The Dow Jones industrial average climbed 16.60 points, to close at 3,979.23, and 30-year Treasury bonds gained almost one full point. The dollar rebounded against most major currencies.

TAKE YOUR CHOICE: "Given the stock market's strong rally since early December, a pullback would not be surprising." (Dow Theory Forecasts) . . . "When Wall Street sees an easier Federal Reserve policy unfolding in the coming months, the stock market will enter a rally period." (Marketmetrics)

"There is more total return potential [gain plus income] in select high-income stocks rather than in bonds at current levels." (Lancz Letter) . . . "U.S. bonds are the best value in the investment world today." (Bob Carlson's Retirement Watch)

WINNERS & LOSERS: "The misery index -- inflation plus joblessness -- is a good political predictor. If it rises in the presidential voting year, the incumbent party usually loses. If it falls, the party probably wins (Re-election of President Nixon in 1972 and Ronald Reagan in 1984.) Bill Clinton should hope the index keeps dropping." (Data from Merrill Lynch)

MONEY MATTERS: "If you had invested $10,000 one year ago last week in the following categories, here is where you would be today: In U.S. stocks, $10,659; in a money market fund, $10,500; in foreign stocks, $10,259; in gold, $10,012; in Treasury bonds, $9,677." (Business Week, March 13)

"If you buy a full-size luxury car, it can cost you up to $13,000 more per year to own and operate than a subcompact car. Your higher costs include fuel, oil, tires, maintenance, insurance and depreciation." (Runzheimer International Survey)

QUOTE OF THE WEEK: "To answer your question, 'What is wrong with the dollar?' I would say that the main problem with the dollar is that it is going down." (Michael Metz, investment strategist, Oppenheimer & Co., in a CNN News interview.)

MONEY SAVERS: Good books to send for include: (1) "The Single's Guide to Homebuying," which tells where to buy a home, how much to pay, mistakes to avoid, etc. Coastal Communications, Box 9187, Mobile, Ala., 36691. $3.

(2) "500 Great Gifts for Less than $20." Ideas for the house, office, outdoor items, automotive, books, jewelry, etc. Empress Publications, 400 Woods Road, Dept. 63, Teaneck, N.J. 07666. $1.

(3) "Baby Bargains," how to save between 20 and 50 percent on baby furniture, clothes, toys, maternity wear, etc. Windsor Peak Press, 1223 Peakview Circle, Boulder, Colo. 80302. $11.95.

WALL ST. WATCH: Tomorrow night, "Wall Street Week With Louis Rukeyser" is titled, "The Oakmark Way," with guest Robert J. Sanborn, portfolio manager, the Oakmark Funds, and panelists Alan Bond, John Dessauer and Gail Dudack.

"Some of the market's top stocks are the cheapest they've been since 1990. Here are a few examples: Fannie Mae, Chrysler, WHX Steel, Bank of New York, Merrill Lynch, Bowne, Cummins Engine and Briggs & Stratton." (Personal Finance, March 8.)

BALTIMORE BEAT: "T. Rowe Price Small Cap Value Fund Rates a 'Best Buy,' says Mutual Fund Forecaster, March 2. The article explains, "Small-cap investing is a sound long-term concept for investors building a diversified portfolio of stock funds, and Rowe price offers one of the best. For a prospectus, call 1-800-638-5660."

"We have high exposure to health care and technology stocks, which is where most emerging growth companies are found. We recently trimmed positions in Three Com, Phycor and Medaphis, and added Boston Chicken and Morrison's Restaurants. Other new names include Input Output and Newpark Resources." (Myron Oppenheimer, investment vice president, NationsBank. Call 347-9174 for the full "Investment Policy" letter.

LOCAL LINGO: Legg Mason's March "Investor's Dozen" includes Advanta, BellSouth, Caldor, Carnival Corp., Circus Circus, Columbia HCA Healthcare, Emphesys Financial, Instrument Systems, Norwest Corp., Premier Bancorp, Standard Federal Bank and Wendy's. Gerald Scheinker (486-8010) will send you the complete letter.

CHEVY CHASE CHATTER: Charles Allmon, Growth Stock Outlook, Chevy Chase, writes: "The upside looks limited, but downside potential could be explosive. Everyone is jumping with excitement over stronger profits. I don't mean to be a party pooper, but let's not forget that corporate profits soared over 40 percent in 1973-74, but the broad market fell almost 50 percent and small OTC stocks plunged 75-90 percent."

LAST LINES: "Spend at least as much time researching a stock as you would choosing a refrigerator." (Peter Lynch) . . . "When everybody likes a stock, it must go down. When nobody likes a stock, it may go up." (John Magee, author, "Technical Analysis of Stock Trends.")

"Three valuable Warren Buffett/Benjamin Graham investment principles are (1) Keep it simple, and keep it focused. (2) Be prepared to think; there's no Holy Grail for investors. (3) Be patient, really patient." (Dick Davis Digest, Feb. 27.)

Regarding the above, those principles are quoted from two new excellent books, "Benjamin Graham on Value Investing" by Janet Lowe and "The Warren Buffett Way" by Robert Hagstrom.

"Beginning in May, anybody with more than $100,000 in a Treasury Direct Deposit account will be assessed a $25 maintenance fee. Treasury Direct is a federal program permitting no-fee purchases of Treasury securities." (Moneypaper, March.)

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