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'Chinese water torture' lowers Dow


Continuing to edge lower in what a local broker calls "Chinese water torture," the Dow Jones average lost 26 points yesterday to close at 3,228.17. Down in five of its last six sessions, the Dow stands 185 points below its all-time high and only 60 points above the New Year's Day level.

AND NOW WHERE? (In proportion received): "We have seen enough bear tracks to convince us that this is a high-risk time to buy stocks. Don't expect bear markets to be announced on 'Larry King Live,' as one usually arrives like a thief in the night." (Dines Letter) . . . "After making an 18-month low of 35 percent on July 10, the percentage of bulls [optimists] has risen to 50 percent and we're near levels where corrections begin. Caution advised." (Investors Intelligence) . . . "The weight of technical evidence suggests that the market's long-term trend should be spelled 'b-u-l-l.' " (Shearson's Large Cap Technician) . . . "Don't rely on the old line that the stock market goes up in the months before an election. During three-month periods before the last 11 presidential elections, the Dow rose an average of only 0.3 percent." (Zweig Forecast)

TUESDAY TIDBITS: "When you sell your house, you may have to pay a capital gains tax on the profit. One way to reduce or avoid this tax is by showing expenses that increased the home's value. Keep careful records along the way." (Dollar Stretcher) . . . "It is an ancient investment principle that before buying stock in a company, you should ask yourself whether you'd like to own the whole firm. If the answer is no, avoid the stock." (Forbes, Aug. 3) . . . "Recession keeps couples together. Despite the traditional belief that more marriages break up in hard times, in this recession fewer people are divorcing." (Crain's New York Business) . . . "If a man can see both sides of a question, you know that none of his money is tied up in it." (Verda Ross)

HOPEFULLY HELPFUL: "Long-term interest rates are falling. For above-average capital gains, consider zero-coupon U.S. Treasury bonds. Brokerage houses strip the coupons from the bond and price the two pieces separately. There is a surprisingly wide gap -- almost half a percentage point -- between the yield of a normal Treasury and the stripped version. Zeros rise more than their bond counterparts when rates fall, but be nimble -- the inverse works as well." (Forbes, Aug. 31)

WORKPLACE WISDOM: "Keep Your Anger in Check After Receiving a Pink Slip" in National Business Employment Weekly, Aug. 24, is worth reading. Excerpts: "Don't let your emotions get the better of you . . . Resist the temptation to rant and rave . . . Don't wallow in self-pity, dwell on your fears, lose faith in your abilities or blame your job loss on others . . . Don't try to hide your job loss from family and friends . . . Tell people close to you about your termination quickly; if you don't, you deny yourself good networking opportunities . . . Don't bad-mouth your former employer . . . Don't make a major financial decision right away."

MIDSUMMER MEMOS: "The average American earns less in 'real' (inflation-adjusted) terms than he or she did 12 years ago." (Anthony Lewis in the New York Times) . . . Barron's, on newsstands this week, runs a full-length feature on market wacko Joseph Granville, 68, titled, "Still Confident, Still Exuberant, Very Bearish." . . . A successful local businessman told me over the weekend, "We'll probably remain at this recession level indefinitely because most businesses have scaled back expenses permanently and it's unlikely that many unemployed will get work again. This isn't the typical business cycle recession."

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