One day after pushing the Dow Jones industrial average to its all-time high, investors turned more cautious yesterday. Hours before the NAFTA vote, the blue-chip indicator closed down 6.42 points, at 3,704.35, still 403 points, or 12 percent, above its New Year's Day level.
FROM THE TOP: "The causes of the 1929 crash were all in the speculative orgy that preceded it. These speculative episodes have occurred at intervals throughout history, and the length of the interval is roughly related to the time that it takes for men to forget what happened before. The useful task of the historian is to keep the memory green." (John Kenneth Galbraith in "The Great Crash: 1929.")
MID-MONTH MEMOS: "The new tax law is a blow to stock market traders. Positions held for a year or less are considered short-term gains, if sold at a profit, and such gains may be taxed as high as 39.6 percent. For long-term capital gains, though, the tax bite is capped at 28 percent." (Moneypaper, November) . . . "MBNA America (Newark, Del.), phone 1  345-0397," is listed under "The Best Savings Yields in the U.S." in Money, December issue . . . Black & Decker is written up in Legg Mason's latest Research Weekly ("Although the economy is not much help, we believe the company's flow of new products [Quantam power tools and Titan locks] will provide earnings growth. Based on earnings momentum and new products flow, our 12-18 month target price remains $26 and we see downside risk to the $18 level.") At midweek the stock sold at about $20 with a 12-month high-low range of $22-$16 . . . Tomorrow night, "Wall Street Week With Louis Rukeyser" originates in St. Louis and spotlights the Midwest economy and its investment opportunities. The Owings Mills-based coast-to-coast program marks its 23rd birthday this week.
HOPEFULLY HELPFUL: "Angry investors who phone the Securities and Exchange Commission for help in resolving disputes with their stock brokers are often getting the runaround -- or worse -- from the federal agency that regulates the brokerage industry. That's the conclusion of a recent informal survey of seven SEC offices across the country and Money magazine's own reporting. Dropping a line to the SEC is fine, but experts say that your best course is to complain to the broker directly. If that tactic doesn't work, contact the brokerage firm's branch manager and then the firm's compliance department." (Money, December) . . . The latest Kiplinger Washington Letter, Nov. 12, feels that interest rates will edge higher, with 3-month T-bills bringing 3 1/2 percent by year-end.
READING LAMP: Yale Hirsch's "1994 Stock Trader's Almanac" has just arrived, and we share these quotations: "Spend at least as much time researching a stock as you would choosing a refrigerator." (Peter Lynch, longtime portfolio manager of top-ranking Fidelity Magellan Fund) . . . "The usual bull market successfully weathers a number of tests until it is considered invulnerable, whereupon it is ripe for a bust." (George Soros) . . . "Stocks are super-attractive when the Fed is loosening and interest rates are falling. Don't fight the Fed!" (Martin Zweig) . . . "The worst mistake investors make is taking their profits too soon, and letting their losses run too long." (Michael Price, Mutual Shares Fund) . . . "I always worry when bargains get hard to find because historically that has meant the market is fully valued and will soon drop." (W. J. Maeck) . . . "When an old man dies, a library burns down." (African saying)
WORKPLACE WISDOM: "As of December 19, the Federal Deposit Insurance Corp. will no longer guarantee each retirement account at a single bank for up to $100,000. Instead, it will cover all your individual retirement accounts, Keoghs and simplified employee pensions combined for a maximum of $100,000 at any one institution. If you exceed the limit, make sure your bank is sound. Veribanc [1 (800) 44 BANKS] will check your bank's health for $10." (Business Week, Nov. 22, on newsstands this week) . . . The current (Nov. 12-18) National Business Employment Weekly runs a worthwhile story, "Firms Force Candidates To Jump Through Hoops," explaining that "your psychological fitness and technical skills may be tested the next time you interview for a job."
TAKE YOUR CHOICE: Recent stock market comment has been almost evenly divided. Herewith, a cross section: "Any stock market pullbacks in the upcoming weeks will represent great buying opportunities." (Louis Navillier's MPT Review) . . . "Any selling will likely be contained within 2 percent of current levels." (Core Commentary) . . . "The wizards of Wall Street are using smoke and mirrors to cleverly distribute the remaining merchandise off their shelves. These professional salesmen are eagerly catering to the public's insatiable appetite for mutual funds and initial public offerings. The Dow is surging, yet those invested in broad market averages are losing money. How deep in trouble will they be if the Dow drops just 10 percent -- heaven forbid 30 percent?" (Jeff Bower's Guru Revue) . . . "The market occasionally pulls back, but the overwhelming amount of evidence points to a continuation of the bull market." (Fund Profit Alert) . . . "Eventually the rise in short-term interest rates will start to hurt stock prices. But not yet. Stocks are still cheap, but bonds are not." (The Capitalist's Companion)