Continuing to edge down from recent record highs, the Dow Jones industrial average slipped 12.45 points yesterday and closed at 4,422.60.
Bucking the downtrend, though, high-tech, computer and chip-maker stocks moved higher, pushing the Nasdaq index to a new peak. Utility stocks ended lower as interest rates inched up a bit.
WALL ST. WISDOM: "Here's how to buy winning stocks: (1) Buy issues recommended by security analysts. (2) Look for recent insider buying. (3) Buy on signs of bottoming out after a price drop. (4) Balance your portfolio evenly among 15 stocks. (5) Be ready to sell stocks that have risen 50 percent -- or sell after two years if they haven't gone up at least 50 percent." (The Astute Investor)
FROM THE MASTER: Some quotations from the new book, "Of Permanent Value: The Warren Buffett Story," by Andrew Kilpatrick. These are Mr. Buffett's words: "Someone's sitting in the shade today because someone planted a tree long ago. . . . I want to be in businesses so good that even a dummy can make money.
"If you could simply extrapolate the past into the future, the richest people would all be librarians. . . . Stocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with management of the highest integrity and quality. Then you own the shares forever."
ROTHSCHILD WRAP-UP: From the latest client letters, quarterly outlook writings, etc., of the Rothschild Pell Rudman Organization, a leading Baltimore-based investment counseling firm:
"Our first-quarter results were strong. . . . Although the decline in global markets in 1994 and early 1995 caused many investors to question global investing, we continue to recommend that clients maintain international exposure [because] as growth stock investors, we manage portfolios with intermediate and longer time horizons. . . . Notwithstanding the market's strong advance in the first quarter, we remain positive." (For full letters, phone 410-539-4660)
OUNCE OF PREVENTION: Working Woman magazine, June ($2.95 and worth it) runs a helpful story. "Your Parents' Old Age Could Wreck Their Financial Plans -- And Yours." Excerpts:
"Ready to take on your parents' financial burdens? You'd better be. If current trends continue, your parents could live long enough to outlive their money . . . 45 percent of people over 65 will require nursing home or other long-term care. . . . Be familiar with their financial situation. . . . Approach the subject diplomatically. . . . Talking about the issue with your siblings beforehand can be helpful, but select one child only to talk to parents, so they won't feel overwhelmed." The article has dozens of practical suggestions.
HOT OFF PRESSES: "You don't have to be a novice to like the new 'Mutual Funds For Dummies,' by Eric Tyson, $16.99. To order, call 1-800-762-2974. The author explains mutual funds in simple English." (Kiplinger's Personal Finance Magazine, June)
In Business Week's May 22 cover story, "The 100 Best Small Hot Growth Companies," we find this Baltimore area listing: "Tessco Technologies, Sparks, Md., distributes wireless communications products such as mobile phones." The firm has shown a "three-year average" 44.5 percent profit increase.
"What You Should Buy In Case The Dow Stumbles" in Fortune, May 29, includes Gannett, Abbott Labs, J. C. Penney, UST ("the smokeless tobacco purveyor"), Reynolds Metals, Alumax, Kaiser Aluminum and junk bonds. Regarding the latter, the article warns, "Proceed with caution."
"Several savvy strategists predict that interest rates will rebound as the economy revives in the months ahead." (Barron's, May 15, in a story, "Why The Bond Market's Rally Exaggerates The Economy's Weakness")
WALL ST. WATCH (In proportion received): "We wouldn't be surprised to see a sell-off soon, but cashing out and heading for the sidelines is not our style. We remain bullish for the long and intermediate terms." (The U.S. Investment Report)
"Sell all individual stocks. The market is in the final blow-off stage, and risk is too high to stomach." (Bob Carver, Market Clues)
"Though many of the bulls and bears expect a short-term correction, our consensus of top timers remains on the optimistic side." (Timer Digest)
L "Overall, the 'smart money' is very bullish." (Major Trends)
Tomorrow night, "Wall Street Week With Louis Rukeyser" is about the housing industry and its stocks.