Record Dow up 13% since January


Forging into record territory for the second consecutive day, the Dow Jones industrial average added 15.65 points yesterday to close at 3,734.53. Since New Year's Day, the Dow is up 433 points, or 13 percent, and from mid-October 1990 through yesterday, the popular indicator has surged 1,369 points, or 57 percent. Before cheering, read on.

TIMELY WARNING: "The main factor that fueled the Dow Jones average rise from 2,365 in October 1990 to the 3,700 area is the drop in yields, which also delivered windfall profits to holders of long-term bonds. But investors aren't likely to have the wind of falling rates at their backs in 1994. Stock owners will face challenges, and fixed-income investors will be hard pressed to achieve double-digit returns from bonds." (Kiplinger's Personal Finance magazine, January.)

WARNING NO. 2: "What separates the men from the boys in investing, the big winners from the also-rans? After much thinking and research, I have come to the conclusion that what distinguishes highly successful investors from every one else is that the smart ones don't do as much as what they do. Really sharp investors don't get sucked in by the latest fad of-the-day, the 'trend du jour.' This bit of wisdom is good to keep in mind at this stage of the bull market that started in 1990 and might run until 1995 or 1996." (Kenneth Fisher, money manager, in Forbes, Dec. 20.)

MONEY-SAVER: "A daily spending journal is the way to start gaining control of your finances. Carry a small notebook or pad of paper everywhere. Every time you spend cash or write a check, note what you bought and how much you spent. Use one page per day. Keep doing this for 21 days -- the time needed to make it a habit -- then add totals per week. Continue for several months until you have a good sense of where the nickels and dimes, which add up to dollars, are going." ("The Best of The Cheapskate Monthly" by Mary Hunt, paperback, $3.99.)

WORKPLACE WISDOM: "The speed of the boss is the speed of the team." (Former Chrysler chairman Lee Iacocca) . . . "I never hired anyone who wasn't smarter than me." (Don Hewitt, "60 Minutes" producer) . . . "The best minds are not in government. If they were, business would hire them away." (Ronald Reagan) . . . "The worst crime against working people is a company that fails to make a profit." (Samuel Gompers) . . . "Whose bread I eat, his

song I sing." (Old German saying) . . . "Few great men could pass the Personnel Department." (Paul Goodman) . . . "He's fair; he treats all of us the same -- like dogs." (Henry Jordan, 1968.)

DECEMBER DIARY: "To save 1993 taxes, make charitable donations now with a credit card. The donation will be deductible for 1993 even if you don't pay the bill until next year. Also, prepay your club dues because the cost of belonging to a club will not be a deductible business expense in 1994." (New York Times) . . . "With a new year coming next month and with it the new Clinton tax plan, (especially with the new higher tax rates), the desire for untaxed income becomes stronger than ever. Since tax-free bonds yield about 85 percent of comparable taxable instruments, the investor in the 28 percent to 39.6 percent tax brackets has a chance to lock in excellent returns." (Middle Fixed Income Letter, December) . . . "If current trends continue, Social Security will virtually cease to exist by 2,023. Ask your prospects if they can afford to retire before they die." (Success, December) . . . "The average automotive worker is receiving a weekly paycheck of $58.47 in cash, the highest peak in the history of the automotive industry." (Forbes, Nov. 1, 1943.)

MARYLAND MEMOS: "Paul's Refuse Service competes for new business in northern Montgomery County by offering to pick up residential trash for $12 a quarter when others charge $35 to $50." (Kiplinger's Personal Finance magazine, January) . . . T. Rowe Price Science & Technology Fund has a full-page, favorable write-up under "Mutual Friends" in Louis Rukeyser's Wall Street, December issue . . . Highest area rates for insured 2 1/2 -year CDs are now at Eastern Savings Bank, American Federal Savings Bank (Rockville), Equitable Federal (Wheaton), Chevy Chase Savings, Loyola Federal and Maryland National Bank. (Data from "100 Highest Yields," Dec. 6) . . . Stocks with local connections reaching 12-month highs in early-week trading include AEGON Insurance, General Motors and Marriott Host; Medimmune,Town & Country and Waverly slipped to yearly lows.

LOOKING AHEAD: It was hard, at midweek, to find much Wall Street optimism. Herewith, a cross-section of opinion: "Any mania can go on for a long time before the day of reckoning arrives, but what bothers me about this one is that so many novice investors have bought stock funds simply because they didn't like 3 percent CD rates any more. Too many buyers are unaware of the stock market's risks." (Zweig Forecast) . . . The current chart on the December Standard & Poor's index shows an ominous, potentially heart-breaking (for the bulls) head-and-shoulders top formation. It's one that calls for slow distribution by insiders to hungry mutual funds looking to lay off millions of dollars on a monthly basis. The decline can be swift." (Petzold On The Market) . . . "The intermediate technical position of the market deteriorated sharply in November. Even though the primary uptrend is intact, several long-term indicators moved closer to a sell signal. However, it may be possible to postpone the correction to next year." (Pring Market Review)

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