Some more 'words to live by' for stock market investors

The Ticker

November 10, 1995|By Julius Westheimer

WITH THE DOW Jones industrial average and most major stock indexes standing this morning at all-time highs -- the Dow is up 1,030 points, or 27 percent, since New Year's Day -- we present timely advice from "The 1996 Stock Trader's Almanac," just received:

"Spend as much time researching a stock as you would choosing a refrigerator." (Peter Lynch) "When I have to depend on hope in a trade, I get out of it." (Jesse Livermore) "Financial genius is a rising stock market." (John Kenneth Galbraith)

"Always sell what shows a loss and keep what shows you a profit." (Bernard Baruch) "When you invest, decide whether you want to eat well or sleep well." (Kenfield Morley) "The stock market is that creation of man that humbles him the most." (Anonymous)

ROTHSCHILD WRAPUP: "A powerful factor in this year's market surge is the public's appetite for mutual funds. 'Baby Boomers' are investing for future college bills, providing strong long-term support for financial markets.

"Sudden sell-offs are possible, but quality growth stocks are best able to weather any volatility." (Stanford Z. Rothschild Jr., chairman, Rothschild Pell Rudman) For complete newsletter, including new purchases, call 539-4660.

WHAT'S NEW (1): "Stocks To Keep an Eye on as the Internet Explodes," in U.S. News & World Report's Nov. 13 cover story, "Gold Rush in Cyberscape" include: America Online, MCI Communications, Microsoft, Netscape Communications, Spyglass, Sun Microsystems and UUNET Technologies.

WHAT'S NEW (2): The latest "Dow 5" stocks, all new this week except Chevron, are: GM, Goodyear, International Paper, 3M and Chevron. Since 1973, a $10,000 investment in the "Dow 5" strategy would have returned $749,680 (no misprint), a compound rate of 20.6 percent per year. Your broker has details.

HOPEFULLY HELPFUL: "On turning 65, you want to collect Social Security benefits. However, you will lose $1 in benefits for every $3 earned over $11,280 in 1995. Solution: Form an S corporation, wholly owned by your spouse. See your accountant." (Smart Money, November)

MARYLAND MEMOS: Tonight, Elaine Garzarelli (who predicted the 1987 crash) visits Owings Mills-produced "Wall Street Week With Louis Rukeyser," with panelists Laszlo Birinyi, John Dessauer and Michael Holland. Channels 22 and 67 at 8:30.

Lockheed Martin, with headquarters in Bethesda, appears under "Selected Issues for a Growth Fund" in Financial World, Nov. 21. The stock is picked by Oakmark Fund's manager, Robert Sanborn.

NOTES & QUOTES: "Merck, Coca-Cola, Pfizer, etc., are excellent businesses, but their stocks are overpriced on a price-earnings basis." (Scott Black, president, Delphi Management)

"1996 is unlikely to match 1995's stock mutual fund performances. We predict a 12 percent decline for the S&P 500 index next year." (Mutual Fund Forecaster)

"Dividend growth rate for the S&P 500-stock index will jump from 6 percent to 12 percent next year. Cyclical stocks will lead." (PaineWebber newsletter)

COMPUTER CORNER: "Pinch Pennies With Your PC" is worth reading in Family PC, November. "Here are computer money-savers: (1) Set up a spending plan. (2) Run the house like a business. (3) Pay bills on time. (4) Pay down the mortgage. (5) Pay off high-interest debt." More on this next Wednesday.

SLIPPERY LEAVES: The New Yorker (Nov. 13) runs one of its rare business stories, this one by Ken Auletta called, "How Did Rupert Murdoch Win China But Not Time Warner?"

"Tax efficiency is simple: Hold on to winners, avoid high-yielding stocks and sell losers to get tax losses." (Forbes, Nov. 20)

If you want to start an investment club, this still-popular best-seller is a must: "The Beardstown Ladies Common Sense Investment Guide," $19.95.

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