Seven nuggets that might help an investor get rich

The Ticker

August 16, 1996|By JULIUS WESTHEIMER

TO PEP UP the mid-August "dog days" on Wall Street, here are "Seven Strategies to Help You Outrun the Market," from "Michael Sivy's Rules of Investing" ($24.95):

"(1) Buy depressed shares after company starts getting its act together. (2) Favor firms that invest in themselves. (3) Put money in companies where top executives own big stakes. (4) Look at stocks after they split.

"(5) Buy closed-end funds at discounts of 10 percent or more. (6) Buy spinoffs a month after they go independent. (7) Snap up companies after they report unexpectedly strong earnings."

LOCAL LINGO: Black & Decker is listed under "Stocks You Can Work With," in Fortune, Aug. 19. ("Boomers are discovering national pastime of fixing up family house, and Black & Decker is market-share leader in professional and consumer power tools.")

HOME HINTS: "Homeowners should pay a little more to buy insurance equal to the cost of rebuilding if their home is destroyed, not simply its market value.

"But don't buy too much. Don't simply accept the standard amount of coverage. Tally the value of your property. If that total is less than insurer's figure, you can save money." (Glamour, Aug.)

GAME OF INCHES: "Improve your job-hunting prospects by just writing, 'Thank You.' A simple follow-up letter after your interview sets you apart from other candidates.

"The letter also shows you can develop positive relationships with others.

"And in the 'thank-you' letter restate how well your skills fit the job requirements." (National Business Employment Weekly, Aug. 11-17, which advises what else goes in that letter.)

WHEAT BEATS DOW: Here is the value of $10,000 invested one year ago: A bushel of wheat, $17,186; over-the-counter stocks, $13,916; technology funds, $13,605; Swedish stocks, $13,378; Hong Kong issues, $13,012; gold funds $12,980; emerging market funds, $12,750; and the Dow Jones industrials, $12,612. (Data from Financial Press Alliance.)

NOTES & QUOTES: "Think long-term. Stay in stocks because they offer best long-term returns. Buy growth stocks that produce consistently rising earnings on little or no debt." (Dick Davis Digest, Aug. 12.)

"In a bear market, the Dow initially should fall to 4,313, where the yield is 3 percent. After a brief rally runs out of steam, the Dow probably will drop to 3,235, where it yields 4 percent." (Geraldine Weiss, Investment Quality Trend.)

"Investors should treat the recent downturn as a correction in a bull market, not the beginning of a bear market." (Dow Theory Forecasts.)

MORE MONEY: "If you keep your nest egg in a passbook savings account, you're only receiving 2.2 percent -- and losing ground to inflation even before taxes.

"For better returns: Find money market funds that pay the highest yields. Move idle cash into CDs. Buy government bonds (call 202-874-4000 for information). Add stocks to your savings mix." (Consumer's Digest, July-August.)

MARYLAND MEMO: "Leading the gloomsters at the 'Investment Seminars' San Francisco conference was Charles Allmon, publisher of Growth Stock Outlook, of Bethesda.

"Brandishing his 'NO BULL' sign at the beginning of his remarks, and declaring himself 'Not here to be Dr. Feelgood,' Allmon predicted a Dow Jones decline of up to 50 percent by 2000, which would then yield 'an incredible buying opportunity.' " (Personal Finance, Aug. 14.)

LAST, NOT LEAST: "For all of 1995, grandparents spent an average of $407 on their grandchildren, compared with $250 in 1988, adjusted for inflation." (Kiplinger's Magazine, September.)

"Disciplined investors recognize the need to insulate the decision-making process from human emotions." (Forbes, Aug. 26.)

"When complaining about anything, complain in person. Letters can be ignored, your opponent can be unreasonable over the phone and it's a lot tougher to disregard someone who's sitting across a desk." (Good Housekeeping.)

"If you're in a jam overseas, your U.S. embassy can help you contact your family, bank or employer to arrange for someone to send you funds." ("The Safe Travel Book," $12.95.)

T. Rowe Price is listed under "Warren Buffett-Type Growth Stocks" in S&P Outlook, Aug. 14.

Pub Date: 8/16/96

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