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A strong market in January often signals a rewarding year


NOW THAT January has ended with solid gains in the S&P; 500 and other popular averages, that famous barometer -- "As January goes, so goes the year" -- indicates that 1996 will probably be an "up" Wall Street year.

"Nothing beats the January Barometer for reliability," says the "Stock Trader's Almanac," explaining, "Based on whether the S&P; 500-stock index is up or down in January, 40 out of 45 full years followed suit, an 89 percent batting average!"

The "Almanac" adds, "The January Barometer outperforms all other barometers in predicting the next 11 months."

ENTER FEBRUARY: This month is historically a Wall Street standoff, inching up an average 0.1 percent over 45 years.

"If you're applying for college aid, get taxes done this month. Many schools won't give awards without this information. If you haven't filed aid forms, do it." (Tax Hotline)

WHAT FRANK THINKS: Here are 1996 stock selections of Baltimore fund manager Frank Cappiello, whose 1995 stock picks on "Wall Street Week With Louis Rukeyser" advanced 57.7 percent:

DSC Communications, Horizon-CMS Healthcare, Kmart, K-V Pharmacal "A," LSI Logic, NetStar, Regal Cinemas, Score Board, Shared Medical, Softkey International, Transportation Maritima Mexicana and YPF Sociedad Anonima ADS.

WHAT YOU THINK: More comments from your Dow Jones contest entries:

"Year-end DJ 5,730. If Clinton is re-elected, the market will rise slightly. If a Republican wins, it will climb appreciably higher. I'm in the middle." (Cokey Rienhoff)

"The world economy will go into a tailspin and cause Dow Jones to have a deep drop, to 3,458." (Michael Staicer Sr.)

"I've been pessimistic three years, obviously incorrectly, but I see no reason to change. It'll be 4,160." (William Stanley)

"6,010 -- a stepping stone to Dow 10,000." (Bill Janson)

MID-WINTER MEMOS: "By consolidating your finances -- checking, mutual funds, stocks, credit cards, etc. -- at one brokerage or bank, you make it easier for those who manage your affairs if you're disabled." (Martin Shenkman, estate attorney)

Tonight, "Wall Street Week With Louis Rukeyser" is titled, "What's New Around the House?" with guest Deepak Raj, managing director, Merrill Lynch, and panelists Elizabeth Dater, Louis Holland and Carter Randall.

CHEER UP! "Death and taxes remain certainties, but random audits by the IRS have been 'nixed' until further notice. Last October, anticipating budget cuts, Feds postponed plans to subject 153,000 computer-selected taxpayers (individuals and businesses) to intensive audits this year." (Cosmopolitan, February)

CAREER CORNER: "Business meeting suggestions: Discuss only pertinent matters. Don't recap for latecomers; let them catch up. Don't allow any breaks. Use a recorder and let participants know they're being taped.

"Keep invitees to a minimum; surveys show five to be the most effective number. Don't go to meetings where you have little to contribute." (Mills Roberts Assoc., executive training firm)

NOTES & QUOTES: "The Fed will not allow a recession in an election year. Stocks will move higher." (Wellington Letter)

"The next time you see a personal computer, take a long, hard look. It may be extinct in five years." (Smart Money, February)

LAST LINES: "To have a stated mutual fund goal of being No. 1 is dangerous. Managers will do anything, including taking extraordinary risks." (Smart Money, February)

"Since last summer, buying into technology weakness has not been profitable. Same results will surface in the rest of the market very soon." (Winell Report)

"There's so much money around that the broad averages remain buoyant even when 'new way of life, therefore new valuation' stops working." (Aeltus Weekly)

"Even if bond yields continue to drop, stocks won't go higher. Downsizing of well-paid middle management will result in at least a recession." (Lemley Letter)

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