How the market often acts after a bang-up year

The Ticker

January 24, 1996|By Julius Westheimer

AFTER last year's Dow Jones 33 percent surge, many people want more than just a "curbstone opinion" as to how stocks will perform this year.

To find clues we asked market historian and newsletter writer Martin Zweig.

Zweig wrote, "We went way back to 1790 on the Dow or earlier averages and found that in 29 years when the Dow was up over 25 percent, the next year recorded a rise 18 times for an average 7.5 percent gain, somewhat more than the average 5.7 percent advance.

"Digging deeper, we checked for first-year gains of 35 percent or more -- like 1995's -- of which there were 14 since 1790. In the following year, the market was up 10 times, averaging a 13.5 percent gain vs. the 5.7 percent norm.

"Based on this data, the odds favor another 'up' year, although a modest one."

LOOKING AHEAD: Here are 1996 selections of investment adviser Harvey Eisen, whose 1995 selections on "Wall Street Week With Louis Rukeyser" climbed 61 percent last year:

Allergan, American Stores, AMSCO, Banyan Systems, Bell Sports, Data Broadcasting, Home Shopping Network, Ideon Group, Pyxis and National Gaming. Mr. Eisen predicts the Dow will close this year at 5,950.

JANUARY JOURNAL: Attention Westinghouse employees and stockholders! Read a cheerful story in this week's (Jan. 22) Barron's "1996 Roundtable," wherein Mutual Shares Corp. manager Michael Price says, "There's a sea change at Westinghouse, a bright outlook and we're buying the stock."

"Investment seminars are good places to learn retirement investing. Many are not glorified sales pitches, but straightforward presentations, especially those given by major financial institutions," (Laura Pederson, financial writer.)

PUSH 1, PUSH 2: Having trouble getting through to your bank to correct errors? "Best times to phone banks are Wednesday through Friday, off hours," advises Working Families, Jan. issue, adding, "Best time to phone IRS is late in week, Social Security at month-end. As for doctors, ask secretaries when physicians' best phone times are."

LAST CALL! Your entry in our Dow Jones forecasting contest must be postmarked by midnight Sunday.

The closest crystal-ball gazer will win dinner for two at his or her favorite Maryland restaurant as guests of Mr. and Mrs. Ticker. Second closest, ditto for lunch. Next 10 receive books about money.

Mail your postcard (no letters accepted) for the year-end Dow Jones closing average. Print your whole-number forecast (no decimals), name, address and phone number. Only one card per person.

Mail the card to Julius Westheimer, Ticker Contest, Business News Department, 5th floor, Baltimore Sun, 501 N. Calvert St., Baltimore 21278. Get busy!

WHAT DAD SAID: Fortune, Feb. 5, on newsstands this week, runs a long, unflattering cover story, "What Makes Steve Forbes Run? Does He Want to Be President or Just Sell Magazines?"

Explaining the article, Managing Editor John Huey comments, "This particular boutique candidate is of special interest to Fortune, of course, because we are a fierce competitor of his principal business, Forbes."

Regarding the above, I recall what my father taught me: "Son, never disparage your competition; sell your own merchandise."

LAST, NOT LEAST: "Be sure to ask how early to arrive at an airport before your flight. If you don't make the deadline, the airline can cancel your reservation and give your seat to someone else." (Conde Nast Traveler)

Washington Savings in Waldorf (301-843-7200) appears under "5-Year Top-Yielding CDs" in Kiplinger's Personal Finance Magazine, Feb.

"I wouldn't be unhappy to see the market sell off 150 points. It would clear the air." (Wayne Nordberg, portfolio manager, Lord Abbett)

"Even with recent sell-offs, I don't think alarm bells have rung. It's still a bull market." (Robert Farrell, Merrill Lynch strategist.)

"For fund investors, 1995 was Olympian. The average U.S. stock fund soared 31 percent, the best showing since 1991." (Money, Feb.)

"The typical taxable bond climbed last year to to an unearthly total return of 15 percent, best since 1985." (same Money issue)

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