The 1991 bull charges ahead


Surprising most observers, the 1991 bull market continued to charge ahead yesterday in heavy trading. When Wall Street opened today, the Dow Jones average stood at 2,909.16, up 34 points Wednesday and ahead 544 points (23 percent) since last October's low.

CURRENT COMMENT: "Over the next few months, we'll see choppy waters, but the basic trend is up. We now call this a bull market, not a bear market rally." (Halvorson Research). . . "We'd love to see prices keep on going to new all-time highs, but we just don't see it. We see a still-deepening recession, war and continuing threats to Persian Gulf oil fields." (The Speculator). . . "I'm more bullish than ever; stocks won't go down to DJ 2,050 now, like I once thought. The war goes well and the Fed is more lenient than ever." (Harvey Eisen on "Wall Street Week with Louis Rukeyser."). . . "This is a stock and bond investor's dream: inflation and interest rates down, but the economy must recover or stocks will stumble." (William Gross, same program.)

BALTIMORE BEAT: Stephen Stauffer, Dean Witter Reynolds, sends along this suggestion: "Buy an equally weighted portfolio of the 10 highest yielding stocks in the Dow average, hold them a year, then recalculate the 'Top 10' at that time and reinvest the proceeds (including dividends) into the new equally weighted Top 10. If you had bought the Top 10 on Jan. 1 of each of the past 20 years, you would have achieved an annual average return of 18.4 percent vs. 12 percent for the Dow index and the S&P; 500." Phone Stauffer (547-7000) for details, charts, etc.

VALENTINE CHEER: Maybe some Maryland firm sent you a Valentine this week and you didn't realize it. In any case, do you know how far some local company issues have rebounded recently? Here, with fractions dropped, are 52-week lows, followed by midweek prices: BG&E; up from 24 to 28; Black & Decker 8 to 12; Crown Central Petroleum "A" 19 to 27; Delmarva Power & Light 16 to 18; MNC Financial (Maryland National Bank) 2 to 3; McCormick 18 to 31; Mercantile Bank 13 to 21; PHH Corp. 17 to 27; Rouse Co. 11 to 19; USF&G;, 7 to 11.

BUSINESS BAROMETER: (All received this week): "Recent stock action not unusual if recession is short. It's a classic 'late-recession' phenomenon, with investors trying to anticipate the beginning of a new economic cycle." (Investment Counselors of Maryland). . . "Our model predicts a 29 percent stock market gain over the next 12 months." (Mutual Fund Forecaster). . . "Within weeks after end of the war, the Dow Jones average could pierce 3,000." (Dessauer's Journal). . . "The economy's continued slump is a major clue that our problems go far beyond lower interest rates, and that the recession will be longer and deeper than the consensus expects." (LaLoggia's Special Report).

MID-MONTH MEMOS: New Yorker magazine (Feb. 18) cartoon, father to 3-year old son who is reading a book, "Timothy, if you never watch TV you'll never know what's going on in the world.". . . Top-performing mutual funds in last five years include Fidelity Growth & Income, Rowe Price International, Pru-Bache Utility, Dreyfus Capital Value, Merrill Lynch Pacific A. (Data from Business Week cover story, Feb. 18.). . . Tomorrow night, "Wall Street Week" highlights food and beverage stocks. . . Saturday, 8-9 a.m., I'll answer your money questions on WBAL Radio. . . Kiplinger Letter says no big tax changes are ahead this year, and that President Bush won't fight hard for capital gains tax cut. . . "Historical stock studies say "Buy." (Dick Davis Letter). . . "Many more times than not, it is better to buy the leaders and leave the laggards alone." (1991 Stock Trader's Almanac.). . . "Slide in interest rates may come to a halt soon." (100 Highest Yields). . . Black & Decker is listed under "Cash Flow Coverage of Interest is Narrow or Negative" in S&P; Outlook, Feb. 6.

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