Unsettled conditions in Russia kept the blue-chip Dow Jones industrial stocks in minus territory yesterday, with the Dow indicator slipping 3.35 points to close at 3,577.76. But the Nasdaq over-the-counter index bucked the downtrend and climbed to a record closing high.
BUSINESS BITS: From "Dollars and Sense" by Col. William C. Hunter, published in 1907: "Learn to say no. Look over the thousands who failed in business, and you will find the failure was the inability to say no. . . . When you get a nasty letter, don't answer it right away; think it over. . . . When you go to New York, don't stay at a second-class hotel. For 50 cents a night more, stay at a good hotel."
ENVELOPE, PLEASE: As of Sept. 30, when the year's third quarter ended with the Dow Jones industrial average standing at 3,555.12, here are names of our contestants who, with their year-end predictions made on Jan. 1, are closest to the actual figure: Mary A. Blumenberg (3,555), Hal Gamber (3,555), Doug Fisher (3,550), Peter J. Schmidt (3,550), Victor G. Cheswick (3,549), Jacqueline Hill (3,549), John W. Modler (3,562) and Gary Blum (3,565.) Three months to go for dinners and lunches at your favorite restaurant, guests of Mr. and Mrs. Ticker!
DOW 5 UPDATED: As promised on my WBAL Radio show last Friday, and in response to many reader requests, here is the "Dow 5" strategy and its updated results through Aug. 30. The strategy consists of buying the five lowest-priced stocks of the 10 highest yielding issues in the Dow Jones industrial average. You hold them for one year (mark your calendar), and each year you readjust the list if any "Dow 5" stocks have changed. If they haven't, you just hold on. Results? Beginning in 1973, $1,000 invested in the "Dow 5" strategy grew to $56,858, total return, and (get this) $10,000 skyrocketed to a whopping $568,580 (no misprint)! As of today the "Dow 5" stocks are DuPont, Merck, Philip Morris, Union Carbide and Woolworth. The astonishing results are produced because you follow a disciplined schedule of buying the most out-of-favor, high-quality stocks on a rigid schedule. (Most people avoid unpopular stocks.) No future guarantees from this corner.
BALTIMORE & BEYOND: Interested in real estate investment trusts? Call Legg Mason (486-8010) for a 32-page booklet, "Investing in REITs for Long-Term Income and Total Return," with definitions, recommendations, charts, etc. ("Selected equity REITs are attractive for income-oriented and total-return accounts.") . . . Stocks with local connections reaching new 12-month highs recently include Rouse Co., Alex. Brown, MNC Financial, Marriott, Martin Marietta, PHH Corp. and Provident Bank . . . Procter & Gamble, with two facilities in this area, was written up in U.S. News & World Report, Sept. 27. Excerpt: "Procter & Gamble sent a welcome message to millions of consumers this year when it cut prices as much as 16 percent on a wide range of products [but] to sustain the discounts while preserving profit margins, P&G; said it would shutter 30 factories and eliminate 13,000 jobs." The story did not mention the Baltimore operations.
HOPEFULLY HELPFUL: Rental-car price wars continue, with some rental-car companies cutting rates in many cities by up to 50 percent . . . "When you meet a prospective employer, never forget that you're facing a buyer with needs. Let employers know that you have what they want." ("Marketing Yourself" in National Business Employment Weekly, Oct. 1, on newsstands this week) . . . "When you buy a used car, one way to protect yourself from lemons and other scams is to buy only from someone you know. Chances are, a friend won't risk alienating you just to sell a car. And if you do have problems with a car you've bought from a friend, you know where to go with your complaints." (Dollar Stretching Ideas.)
WHAT'S AHEAD: About 70 percent of Wall Street comment I read recently was bearish. Herewith, a cross section: "The interesting thing is how many of the smart players are worried -- but not getting out. They agree that valuations are at historic highs, but they can't see any current investment alternatives. But once the few 'smart guys' begin to get out, the rest will run for the cliffs like the lemmings they are. The decline should be abrupt, brutal and short." (Pro Trade) . . . "Fed Chairman Greenspan's easy money policy encouraged a stampede into mutual funds and the result will be a dizzying stock rally. Strap yourself in for a rocket ride, but remember that all moon launches eventually return to Earth." (Aggressive Conservative Investor) . . . "The market acts better than the economy. Buy the 'small-capitalization' stocks; recently they tripled the S&P; average." (Mary Farrell, technician) . . . "Europe is at the beginning of its upward cycle; other than in U.S. stocks, European issues are the place to be invested. Have 25 percent of your money in stocks outside of the U.S." (John Dessauer) . . . "An overdue correction would create opportunities to add to stock positions." (S&P; Outlook) . . . "Bonds have been leading stocks higher this year, with the Lehman Bros. long bond index up 19.5 percent vs. the S&P; stock index ahead 8 percent. Looking ahead, the fundamental factors in our Bond Model are only neutral." (The Zweig Forecast)