The last chance for U.S. issues?


Last August, John Dessauer, who publishes the Orleans, Mass., newsletter Dessauer's Journal, sounded wacko to some when he wrote that "making money by selling short has been taken to an extreme in the United States. This excess, like all others, can continue for only so long."

Dessauer seemed equally out to lunch in October when he started touting the notion of buying bank stocks. At the time the stocks were in a free-fall. He said: "Wall Street is anticipating the next depression. If they're wrong, there are a lot of people who will lose money when those stocks recover."

Well, short-sellers have experienced what they say is their worst year ever, and bank stocks have staged a strong recovery.

What now?

Dessauer is telling anyone who will listen that this may be the last chance for a long time to buy U.S. stocks with the hope of making good money on them.

Not known for making wild and crazy predictions, Dessauer says: "If you ever dreamed of making a killing in your favorite U.S. stock, buy it now. Don't put it off!"

The way Dessauer sees it, U.S. stocks will continue to rise for another few years -- their last gasp, if you will -- and then move sideways "for a very long time" when it becomes apparent that U.S. companies are losing their competitive edge.

While Dessauer's concern about international competition doesn't break new ground, the way he relates it to the stock market hasn't yet made the cocktail party circuit.

Dessauer expects international competition to rise swiftly, especially with the liberation of Eastern Europe, which he believes will unleash that region's age-old cultural dedication to creativity, quality, and technological pioneering.

Dessauer thinks that U.S. companies will lose business to foreign companies, causing profits to slump and stock prices to languish.

He notes that U.S. companies should stop counting on a weak dollar to spark business with international customers. Companies in other countries will keep their prices down, too, because of the heightened competition, and business will go mainly to the companies with the best products and technology.

Which is why he thinks that American investors must start thinking a lot about the foreign stock markets.

"When we look back at the 1990s, it won't be that our stock prices went down, it will be that everybody else's went higher."

MINDING MACY'S: The anticipated recovery of Macy's is a topic of speculation in the retail industry. But junk-bond analyst Thomas Razukas of Fitch Investor's Service says prospects for the company's bonds "for the next five years remain below average," because of the sluggish economy, heavy competition, the need to spend heavily for advertising and debt-interest.

Macy's officials have made it clear that they disagree with that kind of analysis.

They think the turnaround will be evident by Christmas, when they expect the chain to return to historical monthly growth levels of 8 percent to 10 percent over a year earlier.

MEMO: George S. of Castro Valley, Calif., wants to know what "flower bonds" are, and "to what extent they reduce death taxes."

Flower bonds, their informal name, are no longer issued but still trade in the market. They are a type of U.S. government bond that has a very low yield, which causes them to generally sell at a discount to face value. Their selling point is that they can be redeemed at face value by heirs, who inherit them, to pay estate taxes.

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