At the Sept. 30 three-quarter pole -- with the Dow Jones average at 2,452.48, down 300 points (11 percent) this year -- which of our readers are closest in our 1990 Dow Jones forecasting contest? (The winner enjoys dinner for two as guests of Mr. and Mrs. Ticker at the winner's favorite restaurant, runner-up ditto for lunch. No decimals were allowed).
With three months to go, the closest in the reader contest are, in order: Anna Leonard, Baldwin, Md., 2,453; Tom Nolan, Havre de Grace, 2,450; Warren Boutilier, 2,450; Ron Ruark, Towson, 2,447; Richard Lioninsky Sr., 2,459; Leslie Feibelman, 2,459; Louise Smith, Havre de Grace, 2,460; Louise Dickinson, Towson, 2,460. All contestants are in Baltimore unless noted.
In our "expert" contest (bankers, brokers, investment advisers, media stars, etc.), the closest are, in order, newsletter writer Martin Zweig, 2,475; Gruntal & Co.'s Norbert Grunwald, 2,480; Carolyn Walpert, my long-suffering secretary (29 years), 2,500; Legg Mason's Robert Fisher, 2,500; investment adviser Robert G. Wood, 2,520; "Wall Street Week with Louis Rukeyser" producer Rich Dubroff, 2,524.
Note that our closest readers are much closer than our nearest "experts." And of the 802 entrants in our reader contest, 686 contestants guessed too high, 116 too low. Among the 46 "experts," 43 were too high, only three too low. Three months to go!
How do local brokers weather 'down' markets and slow trading days? When I asked Legg Mason's high-producing Gerald Scheinker, he said, "At 6:30 each morning I watch CNN Financial News, then breakfast with The Sun and I'm in our Pikesville office by 7:30. I devour The Wall Street Journal, Investor's Daily, USA Today and The New York Times. At 8 I call clients with early government bond prices and European markets. All day I'm holding clients' hands -- they worry about S&Ls;, banks, Wall Street, everything -- so I buy them tax-free bonds and U.S. Treasuries. I tell them there's always a bull market after a bear market. I never go out to lunch, and I don't leave the office until 6. The next day it starts all over again. I'm having a good year."
I don't want to frighten anybody, but many past Octobers have been Wall Street nightmares. Last year it was the Friday the 13th unexpected mid-afternoon 190 point drop. In 1987 we suffered the worst one-day crash in Wall Street history with that 508-point plunge. And there were back-to-back massacres in 1978 and 1979. Smart Money, October, says, "The situation is ominous. Will Saddam back out of Kuwait so the world can breathe a sigh of relief, or will he face the might of the world? This is not a confrontation of an earlier century where you warn an adversary that you'll attack unless he agrees to your terms. Strategy in the Middle East is to attack without warning."
Ticker Comment: With stocks down about 14 percent since the Iraq crisis began, isn't much of the bad news, present and future, already reflected in today's depressed market averages?
Fred Yoder, PaineWebber (771-3108), will send "On Retirement," with stories on retirement planning and advantages of charitable giving . . . "Wall Street Week" tomorrow night is titled "Where Do We Go From Here?" with Oppenheimer & Co.'s Michael Metz and panelists Laszlo Birini, Bernadette Murphy and Carter Randall . . . "Fearful that recent air-fare hikes will keep people home, some hotel chains are discounting rates up to 60 percent." (U.S. News & World Report, Oct. 8) . . . The Kiplinger Washington Letter, Sept.28, says Bush can't wait long to use force because the rest of the world will lose patience . . . Flight from "junk bonds" picked up steam in August, with funds losing $994 million that month . . . "If your bank offers higher CD rates than others, check credit worthiness of security it offers; Moody's, New York, and Duff & Phelps, Chicago, provide this service free." (Moneypaper, Sept.) . . . Harry B. Gorfine & Co. will mail "Income Shifting: Opportunities Still Exist," if you call or write . . . Did you realize that Federal estate taxes run as high as 55 percent?