Memories of Octobers past prompt questions

The Ticker

September 29, 1995|By JULIUS WESTHEIMER

AS OCTOBER nears -- with its wrenching memories of the October 1929 crash that set off the Great Depression, and the Oct. 19, 1987, 508-point free-fall -- many people ask, "Where does Wall Street go from here?"

After reading conflicting views -- "This is an historically overpriced market like major tops in 1929, 1973 and 1987," or, "In 1996 we'll enjoy improving profits and productivity which give us the best of all stock market worlds" -- let's read what highly successful investor Warren Buffett advises for the long pull:

"Stocks are simple. You just buy shares in a superbly managed business for less than it's worth, then own the shares forever.

"I want stocks in businesses so good that even a dummy could make money.

"If you could simply project stock market history into the future, the world's richest people would be librarians.

"Wall Street is the only place that people ride to in a Rolls-Royce to get advice from people who take the subway.

"Anything can happen in the stock market. Invest so that even if extraordinary events happen, you're still around to play the next day."

READING LAMP: Speaking of Mr. Buffett, a good, new autumn read is "Buffett," by Roger Lowenstein, subtitled, "The Life of Warren Buffett and How He Became One of the Country's Richest Men" ($27.50.) This readable book appears on the New York Times best seller list this week.

HOPEFULLY HELPFUL (1): People who want to use the "Dow 5" strategy with small amounts of money should ask their brokers for information on the Target Equity Trust, or call Nike Securities at (800) 621-9533. Target is a unit investment trust that uses the highly successful "Dow 5" strategy.

HOPEFULLY HELPFUL (2): Looking for a job in retirement? Money magazine's October issue lists these top opportunities: Consulting, temporary jobs, franchising, computer engineer, physical therapist and teacher.

HASTE MAKES WASTE: In view of the proposed BGE-Pepco merger, I suggest that before making any "buy-sell-hold" decisions, you consider consulting your broker or financial planner. He or she best knows your cost basis, capital gains tax liability, other holdings, income needs, etc.

BALTIMORE BOOST: Bethlehem Steel's future and stock get a favorable report in Business Week, Oct. 1:

Highlights: "Investment pro Larry Rice of Josephthal & Co. goes after unwanted stocks -- the next mutual fund darlings He now likes Bethlehem Steel, thinking the stock, around $14, will hit $20 or above soon Bethlehem has downsized, upgraded its mills and is very competitive with producers here and abroad Mutual funds will soon go after steel stocks."

Bethlehem Steel's stock is listed under "Bargains the Pros Neglect," in the new Forbes magazine, Oct. 9 issue, on dTC newsstands this weekend.

MORE MARYLAND: Petroleum & Resources, the Baltimore-based closed-end mutual fund, gets a good send-off in Personal Finance Newsletter, September issue: "Selling at only 15 times estimated 1996 earnings, the shares are attractive for capital gains."

Maryland ranks "A-minus" for "Financial Management," "B" for "Managing for Results" and "A" for "Infrastructure Maintenance" in a Financial World (Sept. 26) state-by-state rundown.

Alex. Brown recommends Gymboree, a young people's apparel maker stock, as a "strong buy," in this week's Barron's: "We see stock weakness as a buying opportunity."

MONTH ENDERS: "People are too impatient; most investments don't show a profit for at least six months to a year." (Jesse Livermore, highly successful, turn-of-the-century investor.)

"The pay of a typical U.S. chief executive is now 120 times that of a manufacturing worker." ("The Winner-Take-All Society," by Robert H. Frank, $25, published this week.)

"The Nasdaq over-the-counter market is the busiest market in the country. More shares and companies are listed on Nasdaq than on either the NYSE or the American." (Worth magazine, October.)

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